Proactive Investors - Burberry Group PLC (LON:BRBY) has had concerns raised about the ethics of its operations, adding to a multitude of issues surrounding the stock.
The British designer brand was ranked lowest of any London-listed fashion group on the Apparel and Footwear Benchmark, a report that analyses how companies are dealing with forced labour risks.
These findings highlight how poorly positioned Burberry is to deal with upcoming and existing legislation, which, going forward, could weigh on its investment case.
Burberry scored 19 out of 100, behind the global industry average of 21 and lower than rivals ASOS (LON:ASOS), Boohoo (LON:BOOH), JD Sports Fashion PLC (LON:JD), Next PLC (LON:NXT) and Associated British Foods PLC's (LON:ABF) Primark.
Fellow luxury rivals Kering (LON:0IIH) and Ralph Lauren also beat the company, but it was able to better big players Louis Vuitton Moet Hennessy, which scored 6, and Hermes, which received 12 out of 100.
When the group puts out its third quarter update on Friday 19 January its unlikely these issues will referenced, instead management’s focus will be on stimulating both share price and sales growth during a turbulent time for the industry.
Weakness in consumer demand in both the US and from Chinese buyers has weighed heavily on the sector over the last three to six months.
Burberry has felt the effects of this more than most, with its shares down over 31% in the last six months.
Confidence over the stock rebounding has waned, with analysts at Stifel placing it on ‘hold’ after struggling to find any immediate catalysts which could send shares higher.
Shares in Burberry are flat on Thursday 11 January, trading at around 1,400p.