yesterday, Burberry (London Stock Exchange: BRBY) Announce New CEOAfter the news, Burberry’s share price rose by 2.3% and has now risen by nearly 20% in the past year. In the past year, trying to manage the pandemic has not been smooth sailing. However, even now that the store reopens and the new CEO is unveiled, I still don’t believe in buying stocks. why is that.
The new CEO is Jonathan Akroyd. He comes from Versace, another fashion company. His experience is beyond doubt, as Akeroyd had sailed in stormy weather before.For example, he ran Alexander McQueen For more than a decade, he had to face the death of the founder.
However, the timing of the move worries me. The current CEO Marco Gobbetti left his rival and announced his decision to resign in June. He will remain in office until the end of this year, and the new CEO will take office in April.
In my opinion, after Marco Gobbetti announced this news, he may have retired mentally from his current role. Therefore, Burberry will have a six-month CEO (at the end of the year), during which time it may not invest 100% of the money. Then, before Akeroyd arrives in April, it will have three months without a permanent CEO at the helm.
During this period, my concern about Burberry stock is that the company may really lack direction. Fashion is a fast-growing industry, and I am not sure if this change will enable companies to keep up with the times. Once investors start to share the same sentiment with me, the stock price may fall.
Uncertain about the future of Burberry stock
Obviously, this is just my opinion. Investors may disagree with this view. One reason may be optimism about financial results.The latest update was in July because Fiscal first quarterIt shows that retail revenue has increased by 86% compared to the same period last year. During this period, digital full-price sales have more than doubled.
This is clearly beneficial to the brand. However, I want to point out that this was released shortly after the CEO’s announcement. We have no new information since then. The next update will expire on November 11.
Therefore, I doubt whether the momentum of this business can continue into April next year. Even after the new CEO takes office, it will take some time for him to adapt and push the company to develop in a specific direction.
The argument against this is that the CEO is just one person. Chairman, designers, sales staff and marketing experts are also very important when trying to promote brand development. And the company has a clear strategy, which it has been pursuing for some time.
But in general, I will not invest in Burberry stocks at this time. Until next year, when I understand what the new CEO is doing with the company, I will not see my intention to invest.
Jonathan Smith does not hold any of the mentioned shares. Motley Fool UK recommended Burberry. The views expressed by the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we made in subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a variety of different insights, We are better investors.