Clothing

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.

Canada Goose IPO may lead investors on wild chase

27 Feb 2017

The fast-growing maker of downy winter coats will be controlled by backer Bain Capital using super-voting shares. High-end Italian rival Moncler offers an aspirational comparison and suggests a possible $1 bln valuation. Trendy fashion companies, however, can be fretful pursuits.

Prada can grow into frilly valuation

14 Feb 2017

An investor who bought shares in the Italian luxury company's 2011 flotation is 12 percent worse off today. But the slide in Prada’s sales is slowing. If China recovers and the handbag maker makes up lost ground online, its sky-high price-earnings ratio will look more fitting.

Nordstrom handed a presidential gift certificate

8 Feb 2017

The higher-end U.S. retailer added some $300 mln in market value after Donald Trump deemed a business decision to discontinue his daughter's clothing line a personal attack. By overstepping his boundaries yet again, the president managed to turn shopping into an act of protest.

Next’s retail crisis has distinctly British twist

4 Jan 2017

The clothing chain warned pre-tax profit may fall 14 percent this year. As well as Next's own problems, that's down to Brexit-related inflation, higher business rates and wage bills. British shoppers have also embraced online retail more readily than in some other markets.

Kering shows up luxury’s diversity problem

14 Dec 2016

Unlike peers, Gucci's owner now has a relatively progressive new global parental leave policy. Women also make up two-thirds of Kering's board. Beyond that, the sector is a relative underperformer on diversity - even though at some labels women drive 80 pct of sales.

Sugar can’t sweeten AB Foods’ retail slowdown

12 Sep 2016

Sales are slowing at Primark, the fast-fashion chain that accounts for two-thirds of operating profit at the sugar-and-retail conglomerate. The weaker pound may hit the clothing chain's profitability next year. A widening pension deficit further sours AB Foods' prospects.

Minority investors should check the returns policy

7 Sep 2016

Sports Direct's shareholders are being trampled by a strong entrepreneur with a 55 pct stake. Italian luxury brand Prada has a similar issue: entrenched founders whose strategy isn’t working. Big shareholders can benefit companies, but other investors end up stuck if things sour.

Hugo Boss offers preview of luxury retrenchment

5 Aug 2016

The German brand's new CEO is cutting 20 stores and 50 million euros of costs to deal with falling sales. While second-quarter revenue beat expectations, net profit fell 84 percent. Hugo Boss's peers will also face a painful reckoning after their own rapid expansions.

Profit upgrade puts Zalando back in fashion

19 Jul 2016

The German online fashion retailer has calmed worries about competition from Amazon by raising full-year operating profit margin guidance by around a quarter and forecasting strong revenue growth. While shares are up by a fifth in a day, valuations can grow richer still.