Clothing

Nike’s boss is on a runaway turnaround treadmill

21 Mar 2025

CEO Elliott Hill issued a disappointing sales forecast, sending shares down 7%. A sneaker glut may require deep discounting and the tired brand needs a jumpstart. Investors’ benefit of the doubt is stretched to breaking point as earnings plunge, threatening yet more pain.

Shein’s IPO haste implies an ill-fitting outcome

12 Feb 2025

The fast fashion retailer seems set on a $50 bln listing by mid-year. With the US applying new tariffs and trade tensions heating up, the normal banker advice would be to wait. If Shein’s motivation is to gain recognition, a cut-price valuation is the wrong way to get it.

LVMH signals US is yet to be luxury’s new China

29 Jan 2025

The $368 bln French group’s China weakness meant its shares had a torrid time in 2024. A surge in richer Americans’ wealth implies the US could be an alternative luxury growth engine. Underwhelming results at LVMH, normally a bellwether, suggest this remains a work in progress.

Puma offers bad mix of sprained ankle and silence

23 Jan 2025

The $5 bln German sportswear group’s shares plunged 20% after a bad fourth quarter, in contrast to Adidas’ strength. Puma’s plan to compete involves selling direct to consumers and a flashy new sports shoe. A key part of investors’ concern is its caginess on what’s going awry.

Richemont shine casts fuzzy light on luxury rally

16 Jan 2025

The $94 bln Swiss group’s shares rose 16% as the Cartier owner smashed quarterly sales forecasts. The numbers pushed up rival stocks like LVMH. That seems premature. US consumers may offset weak Chinese spending but most of its competitors lack Richemont’s jewellery focus.

Versace is an awkward fit for most luxury buyers

10 Jan 2025

Michael Kors owner Capri has put the storied brand on the block. A potential $3 bln valuation wouldn’t be a financial stretch for the likes of Prada. Even so, Versace would represent a different strategic direction to the one the healthier luxury players have embarked on.

Moutai will raise a glass to its LVMH moment

2 Jan 2025

China’s $260 bln liquor giant wants to appeal to young shoppers. A tie-up with local sportswear retailer Li Ning can be the answer. Moutai’s $25 bln cash pile and the potential target’s beaten-down valuation offer a tantalising opportunity to create a national consumer champion.

Luxury firms will warily cut prices to boost sales

19 Dec 2024

High-end goods cost 54% more than before Covid. Yet the likes of LVMH refuse to blame lower volumes on more expensive wares. The fact is that rich Chinese consumers care more about savings than status symbols. Sacrificing margins will be an uncomfortable but inevitable strategy.

Shein IPO is test of UK market discipline

6 Dec 2024

Britain’s financial watchdog may bless the fast-fashion group’s possible $64 bln listing, leaving investors to gauge the risks in its supply chain. Yet passive funds and soft disclosure rules limit shareholders’ ability to price such factors. Better transparency would help.

Shein margin wobble takes bite out of IPO value

14 Nov 2024

The e-commerce giant’s revenue growth slumped in the first half of 2024, and the net margin fell to 2% per The Information. Even if the business recovers, it creates uncertainty that’s compounded by a protectionist US government. Investors may struggle to see the upside.

New Nike boss could consider becoming Big Sneaker

18 Oct 2024

The $126 bln athletic wear maker is struggling with a weak consumer, fashion missteps and a saturated market. Fresh CEO Elliott Hill can try and design his way to growth or go big. A tie up with rival Adidas would consolidate share with the benefit of chunky cost savings.

Luxury’s China wobble will accelerate M&A

16 Oct 2024

LVMH lost 7% of its market value after revealing bleak consumer spending in the world’s second-largest economy. The broader sell-off will make small players more vulnerable. But this will create a big opening for cash-rich giants to pounce on already battered stocks like Kering.

Richemont exits online hell, but heaven is way off

9 Oct 2024

The $70 bln luxury group is offloading its ailing platform YNAP in exchange for a stake in US-listed buyer Mytheresa. Chair Johann Rupert gets rid of a loss-making arm. But the sector’s dubious economics make it hard to see how he winds up with a holding that offsets his blushes.

LVMH wedges door open for future Moncler deal

27 Sep 2024

Bernard Arnault’s $400 bln group will help the CEO of its Italian rival raise his stake in the ski-jacket maker to 18.5%. It tightens Remo Ruffini’s grip on Moncler and puts LVMH in his good books. That leaves the luxury giant in pole position if Ruffini ever opts to sell.

China-EU trade spat’s next swipe may hit LVMH

23 Sep 2024

Beijing is weighing up retaliating against EU tariffs on electric cars. Targeting the French luxury giant and its rivals would cause minimal strategic pain and hit Paris rather than Berlin. Higher consumption taxes, rather than import duties, could also fit with domestic reforms.

Vinted’s price markup rests on limitless growth

9 Sep 2024

Private equity shop TPG may buy a stake in the second-hand clothing site at a $5.5 bln valuation, the FT reported. It implies a much steeper multiple than the main listed peer. That may be fair if rapid growth persists, but the performance of other marketplaces are a red flag.

Nordstrom buyout looks like least bad fit

6 Sep 2024

The US department store chain’s founding family and a Mexican retailer have offered to take it private in a $3.8 bln deal. The share price has risen since a deal was first mooted, but Nordstrom’s prospects haven’t. Its directors ought not to let this one get away.

Luxury’s legal pain is new threat to valuations

20 Aug 2024

Italian prosecutors allege sweatshop-like worker conditions at subcontractors of houses like LVMH’s Dior. That’s a bad look after recent luxury price rises. But if the sector has to hike costs to improve its supply chains, investors may find a new reason to mark valuations down.

Rose-colored Ray-Bans shade brand rehab realities

26 Jul 2024

EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.

French luxury’s China pain may be more evenly felt

24 Jul 2024

Headwinds from Beijing are affecting the performance of Hermès, LVMH and Kering. The three groups continue to operate in different leagues, but they share a common dependence on the People’s Republic. China’s shaming of luxury implies Hermès may be less insulated than before.