After struggling for months for investors, luxury brands Burberry (London Stock Exchange: BRBY) The new CEO Jonathan Akeroyd (Jonathan Akeroyd) was announced this morning. As my own stock holder, I am cautiously optimistic about this appointment and its timely significance for Burberry’s stock price. why is that.
Due to the coronavirus crisis and the need to close most of its stores around the world, Burberry’s stock price has been a roller coaster ride for holders. Just when investors thought it might be safe to get out from behind the sofa, the current boss Marco Gobbetti announced his resignation in June. Since then, the value of the stock has fallen by nearly 20%.
The arrival of Akeroyd should give the owners the stability they desire. In fact, Burberry’s share price is easily in a positive zone today, which shows that the market has generally accepted the news.
What needs to be clear is the fit between Akeroyd and Burberry Do It looks good, even though the number of suitable candidates selected from this elevated job may be quite limited. Before joining Milanese fashion supplier Gianni Versace in 2016, Akeroyd served as the CEO of Alexander McQueen for 12 years. His apparent enthusiasm for returning to the UK also shows that the new leader intends to stay in office for a while.
But let us not surpass ourselves. Burberry’s new leader will not take office until April next year. Gobbetti left his Italian colleague Salvatore Ferragamo in December, under the responsibility of chairman Gerry Murphy during the transition period.
Knowing this, I would not expect to have too many details on Akeroyd’s expected strategy before next spring. For Burberry’s stock price, this is a good time around six months. This may be the case even if trading at the £7 billion cap has improved.
Of course, if broader market concerns about supply chains or inflation intensify, the decline in stock prices may turn into a crash.A sort of Reintroduction of Covid-19 restrictions It may also affect sentiment towards all stocks, especially those that rely on discretionary spending.
As always, there is no certainty about investment. The only thing we can be sure of is that Akeroyd’s service is not cheap. A base salary of 1.1 million pounds and a cash benefit of 50,000 pounds are just the beginning. Potential bonuses for stock awards of £2.2 million and £1.79 million are also up for grabs. Let me put it this way, I will find him to prove the reasonableness of this payment.
This company has been questioning for several months, and I am quite relieved with today’s announcement. Nonetheless, I suspect that this is not enough to help Burberry’s stock price return to summer levels.
Regardless of.As a stupid investor, I know it’s important to follow the company’s direction year Not a few months. This may include taking advantage of temporary stock price drops, such as the one that Burberry has been experiencing. Regardless of the management carousel, I think this is still an elegant and flexible company. Should prosper again.
Of course, this assumes that it will not be taken out by wealthy suitors soon. Akeroyd got its form here, when Versace was taken by Michael Kors (now Capri Holdings) Back to 2018.
No matter what happens, it cannot be boring.
Paul Summers owns shares in Burberry. 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.