Coach rumour sparks Burberry share price jump
Burberry shares jumped by around 4.8% following a report that US giant Coach was considering a merger with the British luxury house.
The Business of Fashion website has reported that a post on financial blog Betaville which claims that Coach is working with Evercore financial advisers on a potential $20bn merger with Burberry. It cites two people close to the situation as sources for the story.
Luca Solca, head of luxury goods at Exane BNP Paribas told the Business of Fashion that while Burberry has often been compared to Coach they take very different approaches to the market with Coach operating in the more affordable end of the luxury space and Burberry moving ever more upwards.
"[...] contrary to Coach, most of the efforts at Burberry in the past 20 years have gone in the direction of elevating the brand and moving it into mega-brand price territory, rather than squarely into accessible luxury," Solca said, and went on to describe a potential merger as a "merger of problems".
This is the second time this year that Burberry has been the subject of take-over rumours. In March this year it placed itself on "takeover watch" following a series of share trades but that turned out to be HSBC Holdings buying the shares for itself on and not of behalf of a mystery bidder.
Burberry released its half-year figures this week revealing a mixed picture of trading and underlying sales down 4%.
