Fashion boffins at Citi visited Burberry Group PLC (LSE:BRBY)’s refurbished Bond Street store and came away with moderately good things to say about chief creative officer Daniel Lee’s turnaround vision for the iconic British fashion brand.
Lee’s current Winter23 runway collection and the Spring/Summer24 collection dropping in December “conveyed a sense of understated elegance reinforced by use of the brand’s archive references rather than logos”, said Citi.
During a Q&A session, Burberry managers “expressed further confidence in the brand elevation and product innovation strategy under Daniel Lee's creative vision, which should support the achievement of medium-term and long-term EBIT margin targets”.
As for the flagship store, the refurbishment represents a “brighter and more inviting concept”.
Yet, echoing recent comments made by UBS, Citi was forced to downgrade its 2024 and 2025 earnings estimates “owing to a softer global luxury demand outlook”.
Reduced China demand, labour shortages and cost-of-living pressures are starting to bite into luxury stocks, causing trepidation across the sector.