MARKET REPORT: Burberry falls again as Fashion Week excitement fades

There was little sign of improvement at Burberry as concerns grew over the company’s status as a luxury brand.

Analysts at Jefferies said the company’s commercial direction was still unclear just days after it presented its latest collection at London Fashion Week.

The broker added that Burberry had received mixed reviews as its move to “affordable fashion” lacked the “wow factor”.

This is the latest blow to the company, which is already under enormous pressure after replacing its chief executive and being kicked out of the FTSE 100 in the summer.

According to Jefferies, trade is unlikely to become easier due to the slowdown in China, lower travel spending and continued uncertainty in the US.

The broker then downgraded Burberry from “hold” to “underperform” and cut the price target by 310 pence. The shares fell by 3.5 percent, or 22 pence, to 604.4 pence, bringing the loss for the full year to almost 60 percent.

London’s major markets gave up yesterday’s gains: the FTSE 100 fell 1.2 percent or 98.73 points to 8,229.99 and the FTSE 250 lost 1.6 percent or 330.87 points to 20,831.84.

Private equity firm Bridgepoint was among the biggest losers after an investor sold nearly 15 million shares at a discount. Shares in the group, which has owned Burger King in the UK since 2017, plunged 11.4 percent, or 43.6 pence, to 339.6 pence.

Close Brothers also came under pressure after analysts at RBC said the merchant bank’s share price was likely to “move sideways” until there was clarity on historical auto finance claims.

The company has set aside costs to cover potential payouts as the City regulator is due to provide an update on the industry-wide review in May next year. As a result, RBC cut its price target on the stock to 540 pence from 620 pence. Shares fell 13.5 percent, or 67 pence, to 431 pence.

Card Factory went the other way after a broker upgrade. Analysts at UBS said the card and gift retailer offered low growth but stable cash generation and the potential for significant shareholder returns.

The Switzerland-based bank raised its rating to “buy” from “neutral” and increased its price target to 180 pence from 116 pence.

Shares, which have risen nearly 30 percent this year, gained 6 percent, or 8 pence, to 141 pence. Rival Moonpig’s strong growth and potential cash returns prompted UBS to initiate coverage with a buy rating and a price target of 350 pence.

Shares rose 0.5 percent, or 1 pence, to 206 pence, bringing annual gains to over 30 percent.

Exhaust fan manufacturer Volution saw a steep rise after announcing the biggest deal in its history.

The group will buy Australasian ventilation specialist Fantech for £144 million. Shares rose 9.8p to 54p and then closed at 608p.

S4 Capital rallied in early trading yesterday, a day after the digital advertising agency warned that lower spending by technology clients would lead to a drop in revenue, but it ended the day lower.

Shares, which fell 5.9 percent on Thursday, lost a further 0.4 percent, or 0.18 pence, to close at 42.16 pence.

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