Burberry Soured

Thursday, 9th November: if you haven’t seen the video of Japan’s president Shinzo Abe taking a tumble in a bunker whilst playing with Trump then you need to immediately stop whatever you are doing and find it. Both himself and his ball failed at the first attempt of getting out the sand, and Abe especially did it in emphatic style. The way he went down could be used as a pretty accurate metaphor for the way markets performed today, with European bourses all struggling. The FTSE opened moderately lower, led by Burberry who saw their shares tank c.10% after their latest update in which investors clearly didn’t take to their plans to become even more exclusive (should’ve got a gift receipt for that announcement mate). They didn’t put it exactly like this, but they will consider where they’re being sold, whom they share their high street with and look at some of their own stores which don’t comply with the new upper upmarket plan. Burberry stayed at the foot of the index all day and closed 9.9% lower.

Sainsbury’s also delivered disappointing results today which saw profits decline despite a climb in revenue. Interim profits were down 9%, beating estimates, with LFL sales (excluding fuel) up 1.6%. The supermarket continues to feel the effects of a weaker pound pushing up the cost of imports, wage inflation and costs associated with the consolidation of Argos. Shares recovered later in the day to close 1.8% lower.

Also dragging the FTSE down were homebuilders, who underperformed after it was revealed house price growth cooled again in October. Prices are declining in many areas across the UK, having said that equally some areas are experiencing growth but overall the RICS condemns the UK’s housing market as gloomy. Which is used a lot to describe UK weather and from that we know this isn’t good at all. At all. Off the back of this, Persimmon and Barratt were only beaten by Burberry for today’s biggest losers.

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