The City doesn't like surprises – especially if it is news that a well-regarded chief executive is leaving with some big projects still to finish. Yesterday, the shock news that Burberry's Angela Ahrendts is leaving to join Apple sent the luxury brand to the bottom of the blue chip table – it tumbled 7.6 per cent.
Ms Ahrendts has overseen a huge turnaround at the group, instigated by her predecessor Rose Marie Bravo. The share price gained more than 250 per cent since Ms Ahrendts joined in 2006.
But news she is leaving next year to join Apple, as senior vice president of retail and online sales, and that designer Christopher Bailey is to take on the joint role of chief creative and chief executive officer, caused the City to worry.
Luca Solca, luxury analyst at Exane BNP Paribas, said: "Burberry is ahead of a major transition in Japan and has a high challenge at its beauty division. Christopher Bailey has left his mark as a creative director, but he is not tested as an executive."
Others argued the share price collapse was also a chance for investors to take profit. Ishaq Siddiqi at spread-better ETX said the fall is "profit taking for sure… the stock was up around 29 per cent year-to-date at the pre-market level and up 461 per cent in the last five years."
HSBC luxury analysts Erwan Rambourg said: "Christopher Bailey has a phenomenal track record as a visionary and a creative spirit. But a chief executive job is undoubtedly different, so the jury will be out on how he can manage that role while still running as chief creative officer."
For now, the punters' verdict appeared to be sell and it lost 121p to 1,464p.
Despite the concerns, Burberry's finance chief, Carol Fairweather, said: "Christopher has been here 12 years and nobody knows it better than him. He has an incredibly sharp commercial mind."
The news of the planned departure came as Burberry announced half-year sales of £1.03bn, up 14 per cent and retail sales up 17 per cent to £694m.
Burberry stood out as a big faller across a wider market awash with optimism.
The US shutdown and impasse over the budget and debt ceiling appears to be coming to an end after two weeks of trouble.
The FTSE 100 jumped 41.46 points to 6549.11 – its fourth day of gains.
Despite the optimism, analysts were still cautious. Alastair Winter, the chief economist at Daniel Stewart & Co, said: "A deal is obviously going to be done, which will release pent-up joy over Janet Yellen's nomination. The only problem is the deal is likely to be too short-term and the absurd debt ceiling will still be in place. It is looking like an economic and monetary union-style can-kicking exercise. The Tea Party really is the biggest threat to global growth, not just in the US."
Top of the leaderboard was miner Rio Tinto after it reported a good quarterly production update. It rose 131p to 3,215p as diggers became attractive again with investors favouring riskier stocks.
There were mixed views on phone and TV group BT. Macquarie rated it underperform and warned that interest on its Sports TV package is fading. In contrast, Berenberg rated the business a Buy and said it is a "rare stock in the sector that is exposed to all the right trends" including fibre broadband growth. It also praised the "management team with a decent execution record" and said it didn't think this was reflected in the share price, which should be nearer 415p. BT shares rang up a 0.9p gain to 354.4p.
Royal Mail completed its first day of full trading and added 14p to 489p – up 48 per cent on its float price.
On the mid-tier index, hedge fund outfit Man Group collected 5p to 83.7p ahead of its third quarter update tomorrow. But analysts at RBC Capital cut its target price to 80p and rated it underperform.
Small cap waste management group Shanks lifted 2.75p to 97.5p on news it has sold its non-core UK solid waste business to Biffa.
AIM-listed utility cost-management consultancy Utilitywise released full-year results that beat forecasts. The business powered ahead 18.5p to 172.5p.
International Greetings – the gift- wrapping and card group – produced a good trading statement and added 2.88p to stand at 55p. Noricum Gold, the Austrian focussed gold explorer, shone 0.05p brighter to 1.175p.