Insider: directors bet Burberry's best days are ahead

A terrible couple of years ended with shares in the luxury fashion chain trading below 600p. They’re now double that, and bosses think there’s much more to come.

30th June 2025 07:56

Graeme Evans from interactive investor

Buyers including Burberry Group (LSE:BRBY) boss Joshua Schulman have helped the luxury goods group to regain its £4 billion price tag as the most valuable stock in the FTSE 250 index.

The Friday lunchtime disclosure that Schulman had spent £318,000 on shares, alongside a move worth £35,000 by finance chief Kate Ferry, inspired a strong end to trading last week.

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The resurgent share price closed at 1,150p, with Friday’s rise of 7% making Burberry the day’s best performing mid-cap stock and 14% higher for the week.

Shares had been as high as 1,200p in February, only to slide below 650p in April as fears over the impact of a global trade war caused investors to dump luxury goods stocks.

American Schulman bought his shares on Friday morning at a price of 1,069.1p, which compares with the 706p seen in July when he took on the role previously held by Jonathan Akeroyd.

Schulman launched his Burberry Forward strategic plan in November, with a focus on stabilising the business and repositioning the brand by focusing on outerwear and its British roots.

He told investors at May’s annual results: “I am more optimistic than ever that Burberry's best days are ahead and that we will deliver sustainable profitable growth over time".

A 6% decline in like-for-like sales in the final quarter of the year was better than forecast as second half earnings of £67 million beat City forecasts of £52 million.

The early signs prompted UBS to abandon its “prolonged scepticism” on Burberry’s elevation efforts, having been Neutral or Sell on the stock since at least 2022. It responded to the results by switching to a Buy stance, including a 1,400p target price.

The bank said the renewed focus on core categories and more accessible price points came at the right time as consumers in the sector were experiencing "luxury fatigue" due to limited newness and elevated prices among peers.

This should enable Burberry to gain market share at a lower cost, driving positive earnings per share momentum as the bank lifted its forecast for the 2028 financial year by 62%.

In order to fund growth opportunities, Schulman hiked the company’s cost savings target for the 2027 financial year by £60 million to £100 million.

As we previously reported ahead of the company’s AGM on 16 July, Schulman received a bonus of £1.2 million in cash and deferred shares as reward for his progress repositioning Burberry.

The remuneration committee said: “Joshua has moved at pace to execute the turnaround and advance our strategy to reignite brand desire, improve performance and drive long-term value creation.”

Buying boring Bunzl

The reluctance of investors to get back on board at growth compounder Bunzl (LSE:BNZL) has been countered by two directors spending £250,000 on shares at a four-year low price.

The workplace supplier of essential not-for-sale products and services stunned the City in April by cutting 2025 guidance due to tougher conditions in its largest region of North America.

It went some way on Tuesday to dispel the stock market adage that profit warnings come in threes when it reported no further deterioration in its trading position.

Chief executive Frank van Zanten, who has run the business since 2016, said the economic backdrop remained uncertain but that actions to improve performance were underway.

He said the operating margin for this year is expected to be moderately below 8%, compared to 8.3% in 2024, but that the second half is seasonally higher and set to show progress.

Shares fell from more than 3,000p to 2,290p after April’s warning and have struggled to recover since then, despite the easing of tariff volatility and an improvement in market sentiment.

The stock closed last week at 2,344p. still near a four-year low and among this year’s worst performers in the FTSE 100.

Chair Peter Ventress disclosed two purchases of Bunzl shares worth £100,000, including one on Tuesday at a price of 2,384p. Ahead of the company entering its closed period, non-executive director Jacky Simmonds also spent £51,000 at 2,327p.

Peel Hunt retained its Hold recommendation and 2,500p price target following the update, but with a valuation multiple of 12.2 times forecast 2026 earnings it said “the shares are looking more interesting to us”.

The broker said it was reassuring that Bunzl made no mention of tariffs in the latest update, adding: “It looks increasingly like it was ‘one and done’, and the focus can now return to the long-term attractions of the compounding model.”

Deutsche Bank, which has a price target of 2,950p, said last week: “We think it is reassuring that first half trading is consistent with the rebased guidance set out at the first quarter, with signs of slight market improvement through the second quarter.”

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