Category Archives: Past the Post

Vix without fear!

It simply defies belief that geopolitical risk has been ignored for so long. The world is a tinderbox but investors don’t seem to care. This is reflected in the VIX index trading at record lows. The champagne has now been flowing for 5 years and the hangover will be a bad one… . It is not a question of if but only when the music will stop. Sentiment has a tendency to turn when investors are least prepared, especially when suspended in a state of intoxication. A game of ‘Musical Chairs’ with a bit of ‘Russian Roulette’ thrown in for free.

Earlier this year, Pinkers Post launched Naked Greed!, a regular column “celebrating the ludicrously undervalued, offering silly yields with great capital growth potential.” Anticipating a severe correction, a follow-up was promised, soon … Pinkers still hasn’t delivered. How sad is that?

Bailey bailing out?

Christopher Bailey, CEO and creative director of Burberry, said yesterday that he was aware he was paid a “significant amount”. Is Bailey bailing out?

It was an exceptionally bold and, indeed, courageous move to appoint the Creative Officer CEO. A first for a FTSE 100. Understandably, investors are nervous; they would almost certainly have preferred a ‘bean counter’ instead. However, this decision, albeit risky, could well turn out to be one of the most visionary appointments in the world of retail: Burberry, like all fashion companies, has to constantly ‘re-invent’ itself in order to stay relevant. After all, what’s IN fashion, will invariably go OUT of fashion. The jury is out but this could prove to be a very smart move, indeed.

Without question, Mr Bailey’s contribution as a creative genius has long been crucial to the success of the business but it was Rose Marie Bravo who led Burberry to mass market success through licensing and then Angela Ahrendts who consolidated the formula on Bravo’s retirement in 2006. Bailey delivered the ‘product’ but the two American ladies monetized it!

Critics have compared Christopher Bailey to Martin Sorrell of WPP and have described his pay package as “Sorrell-esque”. This is unfair – on Sir Martin. Mr Bailey inherited, Mr Sorrell built. Whereas Sir Martin has proved his mettle over many years at the helm of a company he built from scratch, Mr Bailey, as a CEO, has no track record whatsoever. Investors are right to revolt!