Scott Reid: Burberry out of fashion as market jumps

Picture: PA
Picture: PA
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British fashion house Burberry failed to join in the market cheer as its shares plunged after it revealed falling sales amid a slide in demand for luxury goods sparked by a cooling Chinese economy.

Shares in the trench coat maker dropped more than 8 per cent as it said trading worsened in its second quarter.

But the wider FTSE 100 Index broke a recent losing streak, rising 69.06 points or 1.1 per cent to close at 6,338.67, helped by miners and strong gains from consumer goods giant Unilever after a bullish update.

Alastair McCaig, senior market analyst at IG, said: “Those investors desperate to envisage their pint glasses being half full have been given reason to cheer, with Unilever not only beating third-quarter expectations but also talking up the outlook for the rest of the year.”

Unilever shares lifted 100p to 2,890p. Miners such as Glencore followed close behind, up 2.3p to 117.8p.

Retailer WH Smith rose almost 5 per cent, or 73p to 1,614p, in the FTSE 250 after it posted an 8 per cent lift in annual pre-tax profits to £121 million as a 10 per cent hike in earnings in its travel business and cost savings helped offset falling sales at its high street chain.

However, WH Smith joined other retailers in highlighting the impact of the new national living wage, as it said it would cost the group between £2m and £3m extra a year.