Burberry’s share price continues to fall as speculation mounts over its future

Burberry’s recent demotion from the elite FTSE 100 share index has been followed by further falls in its share price as analysts speculate over where the brand goes next.

As of Tuesday morning, the company’s share price is down 73% in the past year and is down 59% in 2024 alone. That gives it a market value of just over £2 billion, which may sound high but is down from £9 billion at one point last year.

It has also fallen almost 10% in the past week and reached a 15-year low on Monday specifically. But it’s up very slightly as of early Tuesday morning, perhaps boosted by bargain-hunters, which often happens immediately after a share fall.

And bargain-hunting is part of the problem as the company has been discounting heavily with analysts from Barclays saying a reliance on discounting has dented its reputation.

The bank’s analysts said in an assessment seen by the Telegraph that the key Knight bag has been sold for as little as £820 at outlets in China, compared to an RRP of over £2,000, undermining the desire for consumers to think about paying full price.

“We believe that Burberry’s association with discounting and promotions is highly damaging to its brand positioning, and we fear that it could take a long time for Burberry to rebuild its credibility on pricing, especially since the group doesn’t intend to reduce its exposure to outlets in the short term,” the analysts said. 

Monday’s share price fall came after Barclays downgraded Burberry following a series of profit warnings and on its belief that the performance will decline further.

The analysts said they “have concerns around the ability of Burberry to remain a high-end luxury brand in line with our coverage considering its lack of disciplined full-price strategy”.

The brand has always been a high-end one but began a move even further upmarket under its last CEO-but-one, a strategy that now-ousted CEO Jonathan Akeroyd continued. With Joshua Schulman, former CEO of affordable luxury brand Coach, now installed in the top job, there has been speculation that the strategy will be reversed.

But Burberry hasn’t commented on its strategy nor on its share price woes with no update expected until its next set of results.