Clothing

China worries give luxury investors excuse to sell

9 Oct 2018

Reports of stricter customs checks on Chinese tourists returning from the week-long national holiday triggered a selloff in luxury stocks. Government curbs are nothing new. But the sector’s high valuations make shareholders nervous about any sign of weaker demand from China.

Wrangler jeans breakup gets a dressing down

13 Aug 2018

Owner VF is separating its denim brands from the rest of its wares. The Wrangler and Lee jeans division will be more indebted and pay a higher dividend. But VF’s pieces add up to less than its $37 bln valuation, which takes the impact out of the company's big reveal.

Aging fashion labels battle in bargain basement

2 Jul 2018

The founder behind Perry Ellis wants to take the clothing company private. An interloper that licenses brands for accessories is offering investors a premium – all of 50 cents a share. When the target is a grab bag of department-store merchandise, upping the ante is cheap.

Ralph Lauren’s growth track runs through China

12 Jun 2018

The clothier aims to boost revenue by $1 bln by 2023. The 16 percent target seems bold given the label’s recent woes and upheaval in the retail sector. But the quintessential American brand’s provincialism may be its saving grace. It has room to expand in the People’s Republic.

Latest M&S overhaul lacks a clear price tag

23 May 2018

The UK retailer will close 100 stores in an attempt to reverse falling like-for-like food and clothing sales. The revamp, sped up by new Chairman Archie Norman, set the group back half a billion pounds last year. With few details about future costs, investors can shop elsewhere.

Holding: #MeToo is putting corporate law on trial

29 Mar 2018

Claims of sexual misconduct at the likes of Fox and Wynn Resorts have led to suits over board duties and disclosure. They’re long shots, largely because business governance is an awkward tool for social change. Yet investors and victims are giving it a new and useful purpose.

Failed MBO leaves Nordstrom in a jumble

21 Mar 2018

The board's rejection of the founding family's $8 bln offer for the retailer makes both sides look too stubborn. Nordstrom is a middling performer in a struggling industry. Compromise would have suited shareholders well. Instead, they face an ill-fitting future.

Inditex still deserves its fashionable premium

14 Mar 2018

Zara’s owner plans to open less new space as purchases shift online, and overall sales growth slowed in its fourth quarter. But web-based sales are strong, and peers are struggling more. It’s trendy to be down on retailers, yet Inditex merits its valuation lead.

Adidas catchup race has further to run

14 Mar 2018

The shoemaker’s shares have outpaced Nike and Puma during a global sportswear boom in the last three years. However, they still trade at a discount to main rivals, despite faster revenue growth and improving margins. Hitting new, higher targets should help Adidas close the gap.

Equity #MeToo risk is more than a crapshoot

6 Feb 2018

Allegations like those made against founders of Guess jeans and Wynn Resorts are impossible to predict. But some industries may be more at risk of sharp, reactive share declines when claims surface. A filter might show gambling and fashion as vulnerable - but finance, too.

M&S held back by dowdy online look

11 Jan 2018

The high street retailer’s food and clothing arms met quarterly forecasts, but both have strategic issues. M&S could dearly use the 25 pct-plus online sales growth seen by smaller rivals like Boohoo.com. Its current measly 3 pct showing is exacerbating its other problems.

Clothing retailers will struggle to resize

3 Jan 2018

E-commerce isn’t the only thing plaguing outfits like Macy’s. U.S. apparel inventories have risen sharply since the financial crisis while prices and sales have fallen. Ripping the pattern requires slimming down and cutting back on discounts, but deal-seeking consumers may balk.

Next cheer may delay essential style overhaul

3 Jan 2018

The UK clothing retailer is more upbeat about the outlook for full-year profit. The danger is that healthier sales and diminishing price pressures will tempt CEO Simon Wolfson to dodge tough decisions, such as much-needed store closures.

Li & Fung family rearranges its sweater drawer

15 Dec 2017

The Hong Kong conglomerate is offloading its struggling knitwear, furniture and beauty products divisions for $1.1 bln. Buying them for a healthy price is a group led by the Fung clan. A company dividend will return some proceeds to them. It's a cozy solution to a prickly problem.

Lululemon retailing regime nears peak fitness

12 Dec 2017

A hot lifestyle brand, a brick-and-click sales model that keeps prices high and a growing opportunity to outfit men has the leisure-wear maker outpacing its flabby peers. Yet growth goals look a stretch and margins struggle to keep up. A premium valuation demands constant toning.

Deckers takes on activist with two left feet

27 Nov 2017

The UGGs bootmaker promises to appoint two new directors next year. It’s a weak attempt to dance away from Marcato’s campaign to replace all nine board members next month. The pushy investor’s role has boosted the stock by 63 pct. Deckers’ leaders may fall flat on their faces.

M&S swaps comfort food for tougher diet

8 Nov 2017

The UK retailer will speed up closures of its clothes stores, aiming to move sales online. A fresh urgency addressing changing consumer habits bears the hallmark of Archie Norman, the new chairman. That’s all the more important with the usually reliable food business going off.

ABF’s sweet tooth will weigh on valuation

7 Nov 2017

The beets-to-boots seller is doing well in fashion as its Primark stores win market share from rivals. But profit in the sugar business will fall as EU prices dip. The exposure to commodity price swings makes it hard to justify a valuation approaching that of Zara owner Inditex.

Under Armour’s governance is a value trap

31 Oct 2017

The sportswear firm’s stock tanked after a rare drop in quarterly sales. Broader retail woes don’t help. But shares have plunged two-thirds since founder Kevin Plank cemented control with non-voting stock. That gives investors little room to exercise the company back to health.

Time for Kering to hang up its boots at Puma

24 Oct 2017

The sneaker maker has been a poor investment for the fashion group and sullies its luxury image. Puma’s recovery could let Kering get out without a loss, even if finding buyers looks tricky. Spinning off the 5 billion-euro unit would be easier, and leave less cash to squander.