MARKET REPORT: Burberry drops again as fashion week excitement fades

There were no signs of Burberry’s troubles abating as concerns grew over the brand’s status as a luxury brand.

Analysts at Jefferies said the company’s commercial direction remains unclear, just days after it unveiled its latest collection at London Fashion Week.

The agent added that Burberry received mixed reviews because its shift to “accessible fashion” lacked a “wow factor”.

It is the latest blow to the company, which was already under huge pressure after replacing its CEO last summer and being dropped from the FTSE 100.

According to Jefferies, trading is unlikely to get any easier due to the slowdown in China, reduced travel spending and continued uncertainty in the US.

As a result, the broker downgraded Burberry from ‘hold’ to ‘underperform’ and cut its price target by 310p. The shares fell 3.5 per cent, or 22p, to 604.4p, taking their loss for the year to almost 60 per cent.

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

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

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

The company has set aside costs to cover potential payouts, with the City regulator expected to provide an update on its sector-wide assessment in May next year. As a result, RBC cut its price target on the stock to 540p from 620p. Shares fell 13.5 per cent, or 67p, to 431p.

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

The Swiss bank upgraded its rating to ‘buy’ from ‘neutral’ and raised its price target to 180p from 116p.

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

The shares rose 0.5 percent, or 1p, to 206p, taking profits for the year to more than 30 percent.

Extractor fan maker Volution soared after announcing the biggest deal in its history.

The group is to buy Australasian ventilation specialist Fantech for £144m. Shares rose 9.8p to 54p, to 608p.

S4 Capital recovered in early trading yesterday, a day after the digital advertising agency warned that lower spending from tech clients would hit revenues. But it ended the day down.

Shares, which fell 5.9 percent on Thursday, lost a further 0.4 percent, or 0.18p, to 42.16p at the close of trading.