Fashion

H&M’s unfashionable stock demands total revamp

31 Jan 2018

The retailer’s operating profit fell by a third in the fourth quarter and operating margin has more than halved in a decade. Its valuation has fallen toward that of dowdier peers. Stopping the rot will at the least require an aggressive online strategy and more store closures.

Bull market lets activists see virtue in passivity

26 Jan 2018

Bill Ackman, who lost his fight with ADP, has taken a stake in Nike but isn’t pushing for change. Dan Loeb sat back as Honeywell’s new boss ignored his advice and beat his targets anyway. Even pushy hedge funds can be tempted to simply ride the waves when a rally lifts all boats.

Burberry’s upward mobility has limits

9 Jan 2018

The 7.5 bln pound British brand hopes a move upmarket will boost its low operating margins. Gucci, for one, turned itself around by ending most discounts and investing in stores. Burberry is priced to succeed, but a less profitable product mix could be a check on its ambitions.

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.

Deckers’ proxy win is a loss for shareholders

14 Dec 2017

The UGGs bootmaker defeated activist Marcato’s bid for board seats, but a falling share price leaves no time to celebrate. As with P&G, the argument for outside ideas and talent was compelling. With that path closed, investors will be impatient for steps to revive a tired brand.

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.

Burberry’s risky new look rules out missteps

9 Nov 2017

CEO Marco Gobbetti’s plans to take the UK brand upmarket mean no sales or operating margin growth until 2020. Investors who lopped 1 bln pounds off Burberry’s market value will now be unforgiving. Only perfect execution and the right new designer can prevent a further slide.

Lycra is stretch project for China’s budding LVMH

7 Nov 2017

Shandong Ruyi snapped up the sporty fabric brand from a subsidiary of Koch Industries for more than $2 billion. That advances the firm’s quiet aim of becoming China’s Louis Vuitton. While less bold than moves by other Chinese conglomerates, it just might work.

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.

Burberry can lose kid gloves along with Bailey

31 Oct 2017

Designer Christopher Bailey is leaving the British fashion brand after 17 years. It has taken the company three years to unpick the deferential 2014 decision to hand him the CEO role. His exit gives new boss Marco Gobbetti a freer hand to implement much-needed turnaround plans.

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.

Stitch Fix IPO fits better than Blue Apron

23 Oct 2017

The personal-clothing shopping service faces tough competition. Yet unlike the meal-delivery service whose public offering flopped in June, it has largely financed rapid growth through profit. Success depends on its shoppers and algorithms continuing to nail fickle fashion.

Coach name-change is more than a fashion statement

12 Oct 2017

The New York luxury handbag maker changed its corporate name to Tapestry. Expensive rebrands can help companies distance themselves from past scandal or capitalise on investor mania for certain industries. Coach’s new identity signals a more acquisitive future to shareholders.

Paris fashion IPO will struggle for luxe valuation

18 Sep 2017

SMCP, the French owner of the Sandro and Maje labels, is planning a listing. Pitched between luxury and the high street, the Chinese-owned group has sales growth and an efficient supply chain to rival retail leader Zara. But its smaller size and high debt will weigh on its worth.

Viewsroom: Corporate America dumps CEO president

17 Aug 2017

Donald Trump’s inflammatory comments about white supremacists have lost him the support and advice of business leaders, leaving him increasingly isolated and ineffectual. Qatar’s stake in the LSE may prompt Saudi Aramco to shun the exchange for its IPO. Plus: M&A for the MAGA era.

VF stitches up signature deal for the MAGA era

14 Aug 2017

The North Face owner is dropping $820 mln for Dickies, a maker of apparel for manufacturing and construction laborers. It gives VF a strong position in the workwear marketplace, which Donald Trump has promised to revitalize – or at least a hedge against fashion's fickleness.

Michael Kors and Ralph Lauren improve their looks

8 Aug 2017

Shares in the U.S. fashion houses leapt as tighter distribution and inventory curbs yielded earnings beats. Yet a harsh retail climate is depressing sales and both shops are late in their turnaround efforts. It will take more work to get their valuations off the discount rack.

Next’s classic model is key to a better look

3 Aug 2017

Sales at the fashion chain returned to growth in the second quarter, helped by better online sales. Next’s direct-sales catalogue gave it a head start over rivals when it comes to selling on the web. It also provides a potential hedge against fewer shoppers in its stores.

Brazil pork mongers find comfort in flip-flops

31 Jul 2017

Selling trendy sandal maker Alpargatas to wealthy banking families will help meatpacking-to-pulp firm J&F pay a huge fine for bribing politicians. The original purchase, from a company also embroiled in scandal, is being probed by authorities too. It's a Brazilian microcosm.