FashionUnited Top 100 Index swam against the current on Wednesday as it closed higher, reaching the 1,273.81 and rising by 27.57. In contrast, Burberry suffered its worst fall in 3-year time while the UK retail saw its poorest performance in over a year.
Under the light was Esprit, valued at just $1.4 billion on Tuesday and therefore sold for 32 cents per dollar of revenue, according to data compiled by Bloomberg. Yesterday, the stock surged the most in almost three years and adding almost 11%.
In London, Burberry shares traded lower by 9.8 per cent to £13.61, its sharpest drop in nearly three years. Non-executive director David Tyler, the current chairman of J Sainsbury, sold 20,000 Burberry shares at £14.61. Mr Tyler had been finance director of Great Universal Stores until the retail conglomerate’s spin-off of Burberry in 2005. However, and helped by a recent management roadshow, Burberry shares had risen nearly 27 per cent in a month and were trading at a premium to peers at 26 times earnings so were vulnerable to profit-taking, dealers said.
Broker Alphaville has lifted its recommendation on luxury goods group Burberry to "reduce" from "sell", pointing to its strong first quarter update. The broker notes that the rich continue to favour luxury products despite their expense. "The emerging markets are continuing to zoom with stores acquired in China contributing 20% to the retail business's underlying growth," Alphaville says. It notes that the momentum has been maintained despite "bleak" economic news, but adds: "However, the recent collapse of equity markets if maintained could have an impact on luxury products' consumption." It notes that the shares trade at about 25 times earnings, which causes it to "see the share valuation as being stretched."
Meanwhile, UK retail sales saw their worst performance for 16 months in September, the CBI business group has said. Its latest Distributive Trades Survey found that 24% of retailers said sales were higher than the same month last year, compared with 39% who reported a fall. This gave a balance of -15%, the weakest measure since May 2010, but in line with analysts' expectations. The CBI blamed rising unemployment, low wage growth and high prices. "Shoppers are still clamping down on discretionary spending, and focused on buying the basics at the best price," said the CBI's Judith McKenna.
Elsewhere, CEO and 10% Owner of GIII Apparel Group LTD. (GIII) Morris Goldfarb, bought 10,000 shares of GIII on 09/26/2011 at an average price of $22.99 a share. GIII Apparel Group Ltd. has a market cap of $472.8 million; its shares had an annual average earning growth of 24.3% over the past 10 years. In the same line, shares of V.F. Corporation (VFC) had a total return adjusted 52 week high of $130.56 per share.
According to Seeking Alpha, Abercrombie & Fitch (ANF) has exceeded its peers in value creation over the last four-year period. At the same time, the stock is far more overvalued than its competitors on a multiples basis. It currently offers a low 1.13% dividend yield.