Clothing

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.

Fast Retailing tailors a bright future in Asia

13 Oct 2017

Full-year results from the $32 bln fashion retailer behind Uniqlo show it is back on track overseas. Fast Retailing is growing rapidly across Asia, has staunched U.S. losses, and has bold plans for China. After earlier missteps, this Japanese group is going global in fine style.

College-sports fraud case obscures the real crime

26 Sep 2017

Federal prosecutors have charged 10 people, including four coaches, with using bribes to influence university basketball players. The government says the case exposes the dark underbelly of the sport. But fraud flourishes largely because the NCAA cartel refuses to pay athletes.

A trend for Burberry to copy: focus on margin

12 Jul 2017

The British brand had a good first quarter and is on track to deliver planned cost cuts. That still leaves new boss Marco Gobbetti with plenty to do to rebuild investors’ confidence. A good option would be to follow Saint Laurent’s lead and set a firm operating margin target.

Amazon deal can help Nike get back on track

30 Jun 2017

The $96 bln sportswear maker confirmed it will sell its sneakers on Amazon after years on the sidelines. Though still the dominant brand, it has been losing share mainly to Adidas. The initiative, coupled with its own direct-to-consumer push, could make Nike a pacesetter again.

UGGs could be cozy fit for buyout barons

28 Jun 2017

A pushy investor in $2.2 bln Deckers, owner of the trendy sheepskin-lined boots, issued an odd ultimatum to the board: sell the company or face a fight at the ballot. The numbers may stack up for private equity. It's a question of whether valuation and retail risk are too high.

J.Crew bond revamp is roadmap for asset transfers

14 Jun 2017

The retailer is trying to restructure $567 mln of debt giving some bondholders access to valuable assets that will irk other lenders. To bridge the gap, they’re offering those lenders buyouts at par. It’s a clever way to mend several problems. Other wobbly retailers take notice.

Franco-British laundry deal hinges on spring clean

8 Jun 2017

French group Elis is forking out 2.2 bln pounds for struggling UK rival Berendsen. A 45 pct premium secured the support of the target’s board but gives the buyer a measly 6 pct return on capital. The deal only creates value if the new owner has a plan to clean up its purchase.

Gucci shows up rivals – and analysts

26 Apr 2017

The Italian label’s first-quarter sales rose 48 percent, double even bullish predictions. Global luxury spending is flat so rivals are probably losing market share. The difficulty of spotting winners and losers in this skittish sector makes current lofty valuations suspect.

LVMH has cash to burn but no hot targets

10 Apr 2017

First-quarter sales at the French maker of Moet champagne and Louis Vuitton handbags grew 13 pct year-on-year. Falling debt and strong cash flows are swelling the acquisitive group’s M&A war chest. But the most attractive targets are protected by family shareholdings.

Zara may end up bound by family ties

7 Apr 2017

The founder of Spain's Inditex, which owns the fashion chain, placed his stake in a holding company, ensuring his heirs keep control. It looks benign for investors, who have made handsome returns. The problem comes if future retail disruption calls for a break from tradition.

Asos takes costly fashion cues from Amazon

4 Apr 2017

The UK online clothes retailer has raised sales forecasts on international demand. But Asos is becoming pricier to run: six-month costs rose 38 pct, more than the group's top line. Asos is investing prudently, but a rich valuation leaves it exposed to web-based competition.

Next takes fashion tips from financial world

23 Mar 2017

The retailer has subjected itself to a stress test – previously the stuff of banks. The result: if a store’s sales fall 6 pct a year for a decade, its net profit margin will halve. Openness about problems is welcome. But this voluntary exam may gloss over some other risks.

Adidas has the speed, now for the destination

8 Mar 2017

The sports brand shows how quickly fortunes in the consumer goods industry can turn. Better products and marketing are boosting sales. Profit is up too, but margins are still trailing Nike’s by a mile. Closing that gap will be the ultimate test for new boss Kasper Rorsted.