Burberry faces FTSE 100 demotion in fresh blow for troubled brand

British brand Burberry is being removed from the FTSE 100.

Burberry’s share price has fallen and is at risk of being expelled when the indicative reorganization is announced next week.

Known for its plaid and trench coats, it has struggled with poor sales as a slowdown hits the luxury industry, with shares down 50 percent this year.

Now it looks set to move the company – now worth £2.5 billion – to the FTSE 250.

Preliminary changes are set to be announced on Tuesday, with £4bn-plus insurer Hiscox taking its place, whose shares have risen 21 per cent in the past year.

Burberry’s new boss, Joshua Schulman, already faces a tough task.

Share prices fell to a 14-year low last month as boss Jonathan Akeroyd left after just two years in charge.

The company hired former Michael Kors and Jimmy Choo CEO Schulman and scrapped the dividend.

Wealthy clients have cut back on expensive clothes, such as the signature £1,900 trench coat, and accessories, and Burberry has now been identified as a takeover target.

There are also fears that private equity predators will target the 168-year-old British company.

Global index provider FTSE Russell says a stock will be thrown out if its market capitalisation at the time of the shake-up is 111 or lower. A stock that rises to 90 or higher will be allowed in. Burberry is ranked 140th in the FTSE 350. The final changes will be announced on 4 September.