Shares in luxury fashion label Burberry made a wobbly debut on London's stormy stock market this morning, dropping below their 230 pence sterling offer price on the London Stock Exchange despite a pricing at the bottom of expectations.
The company, famous for its trademark beige check, began trading at 233p but soon fell to 227-1/2p, valuing the company at just over £1 billion.
Burberry's owner GUS, which is retaining a 77.5 per cent stake in the 146 year old business, decided to press ahead with the flotation despite grim stock market conditions that have scared away many other market hopefuls.
The company's shares were offered to institutions at the bottom of the 230-290p range GUS had predicted. That ensured there was enough demand to keep the stock afloat in early dealings and sentiment was buoyed by a sharp rebound in London shares from yesterday's five-year closing low.
At the offer price, Burberry was valued at a 10 per cent premium to other UK stores groups on the basis of prospective earnings but at a 40 per cent discount to a luxury goods peer group, which includes Moet Hennessy-Louis Vuitton (LVMH), Gucci, Bulgari, Richemont and Hermes.
Thomas Burberry, founder of the fashion empire, started out in 1856 in a draper's shop in Basingstoke, southwest of London.