Luxury goods brand Burberry (BRBY) has ended its 15-year sojourn in the FTSE 100.

The relegation comes after dramatic share price falls for the company in 2024. EasyJet (EZJ), which had been on course to suffer the same fate, looks to have saved itself with a recent rally (confirmation of the outcome of the reshuffle was due after market close on 4 September).

In May this year, EasyJet investors became rattled as its chief executive of seven years Johan Lundgren said he was to step down in early 2025.  

Lundgren’s decision to fly the coop was surprising given it came the same day the budget carrier reported a 22% increase in total revenue to £3.26 billion and a 17% increase in passenger revenue to £2.04 billion for the six months ending 31 March 2024.

Year-to-date Burberry shares are down 53%. It has been beset by issues not only the pandemic, but a slowdown in the global luxury goods market (especially in China) and a succession of senior staff changes.

In July 2017, Marco Gobbetti took the reins as CEO, but then left in 2021, followed by CFO Riccardo Tisci and COO Julie Brown. In 2021, Jonathan Akeroyd become CEO only to be replaced by former Coach, Jimmy Choo, and Michael Kors head Joshua Schulman this year.

Any company in the FTSE UK indices falling to 111th position or below in market cap terms is automatically deleted from the FTSE 100 and any company rising to 90th position or above is automatically added to the FTSE 100. If a company leaves the FTSE 100 because it has fallen to 111th position or below, the highest ranking FTSE 250 company, even if it is below 90th position, will enter the FTSE 100 as the number of constituents must remain at 100.

A similar process occurs for changes to the FTSE 250 index, although the bands for these changes are 325th or above or 376th or below.

Changes to the index are significant because of the flows from tracker funds, which have to buy the shares of the constituents of the index they track.

There was good news for affordable computer developer Raspberry Pi (RPI) which enters the FTSE 250 index, several months after making a strong debut on the London Stock Exchange with its IPO (initial public offering) priced at 280p (the top end of the range).

Bermuda-based insurer Hiscox (HSX) and large-scale logistics warehouse investment company Tritax BigBox REIT (BBOX) were vying to take Burberry’s spot in the UK’s flagship index as we went to press.

Hiscox reported a solid set of full year results in March, doubling its pre-tax profit for 2023 to $625.9 million. its shares have gained 19% over the past year. 

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