LONDON BRIEFING: Burberry loses CEO to Italian competitor Ferragamo

(Alliance News) - Burberry on Monday said Marco Gobbetti will step down as chief executive ...

Alliance News 28 June, 2021 | 8:12AM
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(Alliance News) - Burberry on Monday said Marco Gobbetti will step down as chief executive officer and leave the company at the end of 2021, while Italian fashion firm Salvatore Ferragamo said it has hired Gobbetti as CEO and general manager.

Burberry explained that Gobbetti - who it said has led a transformation of the British luxury brand and business - will be stepping down to take up "another opportunity that will enable him to return to Italy and be closer to his family".

Ferragamo said Gobbetti will take up his position as soon as he is released from his contractual obligations at Burberry. It noted that he is "an Italian manager with a long and relevant professional career in the luxury and fashion sector".

Founded in 1927, Ferragamo sells high-end shoes, leather goods, apparel, silk products and other accessories, along with women's and men's fragrances.

Gobbetti was appointed as CEO of Burberry in 2016 and, alongside Chief Creative Officer Riccardo Tisci, was tasked with turning the business around after investors lost confidence in previous CEO Christopher Bailey. Gobbetti took over from Bailey in November 2017.

The UK luxury retailer, famed for its trench coats, will now begin the search for a successor. Burberry anticipates Gobbetti will remain with the company until the end of the calendar year. In that time, he will work with Chair Gerry Murphy to provide full support to the executive leadership team on an orderly transition, Burberry added.

Murphy commented: "The board and I are naturally disappointed by Marco's decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad. With the execution of our strategy on track and our outlook unchanged, we are determined to build on Burberry's strong foundations to accelerate growth and deliver further value for our shareholders."

Burberry shares were down 5.1% early Monday in London. Ferragamo shares were up up 2.3% in Milan.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: up 0.2% at 7,126.40

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Hang Seng: down 0.1% at 29,267.10

Nikkei 225: closed down 0.1% at 29,048.02

DJIA: closed up 237.02 points, or 0.7%, at 34,433.84

S&P 500: closed up 14.21 points, or 0.3%, at 4,280.70

Nasdaq Composite: closed down 9.32 points, or 0.1%, at 14,360.39

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EUR: soft at USD1.1931 (USD1.1945)

GBP: flat at USD1.3906 (USD1.3910)

USD: down at JPY110.65 (JPY110.75)

GOLD: up at USD1,782.85 per ounce (USD1,781.20)

OIL (Brent): up at USD76.15 a barrel (USD75.81)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Monday's Key Economic Events still to come

1100 BST Ireland retail sales index

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The UK's financial watchdog has banned leading cryptocurrency exchange Binance from all regulated activities in the UK. In another sign of an international crackdown on the cryptocurrency industry, the UK Financial Conduct Authority announced its move against Binance Markets – part of the wider Binance Group – late on Sunday. "Binance Markets Ltd is not permitted to undertake any regulated activity in the UK," the FCA said.

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New coronavirus cases popped up in cities across Australia on Monday, prompting local authorities to impose restrictions in areas not used to living under strict Covid-19 rules. Australia has been broadly successful in containing virus clusters, but is now battling flare-ups in at least four cities across the vast continent nation. Brisbane, Darwin, Perth and Sydney have all reported new cases of the highly contagious Delta variant, which first emerged in India and has spread in Australia after escaping from hotels used to quarantine returning travellers. The largest outbreak is in Sydney, where 130 people have tested positive for Covid-19 since a driver for an international flight crew was diagnosed in mid-June, with the city's residents now under stay-at-home orders for two weeks. A 48-hour lockdown of Darwin and surrounding areas – due to end Tuesday – was extended to Friday after a cluster linked to an outback gold mine grew to seven cases.

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US President Joe Biden ordered airstrikes against Iran-backed militia groups in the Iraq-Syria border region on Sunday. The targeted facilities were used by Iran-backed militias engaged in drone attacks against US personnel and facilities in Iraq, Pentagon press secretary John Kirby said in a statement. Two locations in Syria and one in Iraq - both close to the border between the two countries - were targeted. The Pentagon said the locations were operational and weapons storage facilities used by several Iran-backed groups including Kata'ib Hezbollah and Kata'ib Sayyid al-Shuhada.

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BROKER RATING CHANGES

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HSBC CUTS M&G TO 'HOLD' ('BUY')

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HSBC CUTS ST JAMES'S PLACE TO 'HOLD' ('BUY')

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HSBC RAISES DR MARTENS TO 'BUY' ('HOLD') - TARGET 510 (490) PENCE

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COMPANIES - FTSE 100

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Anglo American said it has finalised its transition from thermal coal via the sale of its shareholding in Cerrejon, its 33.3% owned coal mine in La Guajira, Colombia. Anglo said it entered into an agreement for the sale of its interest in the Cerrejon joint venture to Glencore for a total of USD294 million. The move represents the final stage of Anglo's previously announced transition from thermal coal peer operations, it noted. Glencore and BHP currently each also hold a 33.3% interest in Cerrejon. Glencore intends to acquire both Anglo American's and BHP's interests and will thereby assume full ownership of Cerrejon upon completion, Anglo explained. Glencore said it "strongly believes" that acquiring full ownership of Cerrejon is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with its commitment to a responsible managed decline of the company's coal portfolio. Glencore said production volumes are expected to "decline materially" from 2030. "Disposing of fossil fuel assets and making them someone else's issue is not the solution, and it won't reduce absolute emissions," said Glencore CEO Ivan Glasenberg

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JD Sports Fashion said Iberian Sports Retail Group, the retailer's existing 50% intermediate holding company in Spain, has entered into a conditional agreement to acquire 80% of the shares of Deporvillage. JD said Iberian Sports Retail is to pay maximum of EUR140.4 million for the Spain-based online retailer focused on specialist sports equipment. Chair Peter Cowgill said: "Deporvillage has a strong consumer-centric approach and is the market leader in its categories in Spain with significant potential for further international development."

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GlaxoSmithKline has hired two investment banks to advise on plans to list its consumer unit next year and defend against the influence of activist investor, Elliott Investment Management, Bloomberg reported late Friday. Bloomberg said that the FTSE 100 pharmaceutical firm has hired Goldman Sachs and Citigroup to assist with its planned spinoff. On Wednesday last week, GlaxoSmithKline confirmed plans to separate its Consumer Healthcare arm, which includes products such as Aquafresh toothpaste and Nicorette gum. GlaxoSmithKline said it aims to list the division on the London Stock Exchange by mid-2022, but will continue to hold up to 20% of the business to sell at a later time. The separation and an accompanying 30% dividend reduction are designed to enhance GSK's focus on its drugs for cancer, HIV and other diseases.

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COMPANIES - MAIN MARKET AND AIM

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Online property finance platform Lendinvest is considering a London stock market listing, Sky News reported late Friday. The intention to float comes two years after the company shelved its previous attempt to go public. Lendinvest could reveal its initial public offering plans this week,

Sky said, adding the flotation plan will come at a sharply lower valuation than a GBP500 million price tag mooted in 2019. Lendinvest, which was set up in 2008, is expected to seek a valuation in excess of GBP300 million, Sky News said, citing insiders.

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Monday's Shareholder Meetings

Anglo-Eastern Plantations PLC - AGM

Avacta Group PLC - AGM

City Pub Group PLC - AGM

Escape Hunt PLC - AGM

Eurasia Mining PLC AGM

Futura Medical PLC - AGM

Gulf Marine Services PLC - AGM

Hiscox Ltd - EGM

ICG-Longbow Senior Secured UK Property Debt Investments Ltd - AGM

ImmuPharma PLC - AGM

Kanabo Group PLC - AGM

Longboat Energy PLC - GM re reverse takeover

Pennon Group PLC - GM re share consolidation & changes to AoA

Symphony Environment Technologies PLC - AGM

Volvere PLC - AGM

Zinnwald Lithium PLC - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Burberry Group PLC 1,783.50 GBX -0.78
M&G PLC Ordinary Shares 199.15 GBX -1.51 -
St James's Place PLC 1,559.50 GBX -3.35 -
Dr. Martens PLC Ordinary Shares 398.40 GBX 0.35 -
Salvatore Ferragamo SpA 17.61 EUR -0.62

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