|Bid||0.00 x 0|
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|Day's range||23.48 - 23.48|
|52-week range||22.02 - 50.75|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
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(Bloomberg Opinion) -- As Burberry Group Plc kicks off the reporting season for luxury goods makers, it has unveiled a look the market wasn’t expecting — and it’s not a good one.Burberry’s first-quarter like-for-like sales, albeit down 45%, were slightly better than expected. But its outlook for the second quarter — a 15-20% decline in comparable sales — was worse, with sales to department stores expected to be particularly weak. Shares in Burberry fell as much as 8%.Investors are waking up to the fact that Burberry has some distinct disadvantages in the pandemic-plagued world we’re living in.The British fashion house best known for its iconic trench coats is in the third year of a turnaround plan under Chief Executive Officer Marco Gobbetti and Creative Director Riccardo Tisci, the moment when heavy investment in the new strategy was meant to be paying off with higher sales and profits. But while there are some signs of a buzz around Burberry — limited edition bag collections have been selling out in China for example — it has not yet acquired the cachet of the mega brands such as LVMH’s Louis Vuitton. Kering SA’s Gucci, for example, was flying by this stage of its reinvention under Creative Director Alessandro Michele.A dependence on Chinese consumers, who account for about 40% of Burberry’s sales, is becoming a bit of a liability. Its position behind the luxury-goods behemoths means it must fight for every sale. Normally many of their purchases are made when they splurge during trips abroad, but, as the world continues to grapple with the coronavirus outbreak, the Chinese are staying at home like everyone else. Burberry doesn’t yet have the standing to pivot to local consumers in Europe in the way that a brand like Kering’s Bottega Veneta, which is enjoying a revival under a new designer, may be able to. Burberry has one more thing working against it. It’s still developing its handbag category, perennially one of the hottest parts of the market. If consumers outside of China follow the “revenge shopping” playbook, where they celebrate their freedom from lockdown by spending some of their accumulated savings on a treat, handbags are likely to be one of the premier purchases.Plans to cut up to 500 jobs around the world, as Burberry seeks to make its stores and offices more efficient, only serve to reinforce the need for change. It was always going to be tough for Burberry to “do a Gucci” by making its distinctive style, including the black, white, tan and red check, cool again. At the same time, it must elevate its products, particularly handbags, from the so-called accessible luxury position to the top echelons of the industry. The pandemic has made Burberry’s task even tougher.What’s more, across the market, Covid-19 is making the polarization between the winners led by LVMH, Kering and Hermes and the rest all the more extreme. As the reporting season gets under way, it will be worth watching other fashion houses that are also in the midst of a turnaround: Prada SpA, Salvatore Ferragamo SpA and Tod’s SpA, for example.If some of the smaller brands such as Burberry do struggle in the post-pandemic world, one of the bigger, more resilient luxury groups might decide that now is the right time to take advantage of that weakness, and add to their portfolios. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
With me today are Tod Carpenter, Chairman, CEO and President of Donaldson; and Scott Robinson, Chief Financial Officer. This morning, Tod and Scott will provide a summary of our third quarter performance, including an overview of how we are navigating the complexities created by the coronavirus pandemic.
Global sales of luxury goods are expected to slump by 50% to 60% in the second quarter even as some countries begin to ease coronavirus lockdowns and despite signs of recovery in the Chinese market, consultancy Bain said on Thursday. The coronavirus crisis, which first hit China late last year before spreading to Europe and the United States, has kept shoppers at home and forced retailers to shut stores, resulting in a crushing halt to a decade of spectacular growth for high-end brands. With the April to June decline coming on top of an estimated 25% drop in the first three months of the year, Bain expects global sales of luxury handbags, clothing and cosmetics to shrink by between 20% and 35% in 2020, against a previous estimate for a 15% to 35% decline.