Sportswear and children retailers lift Index

Wednesday, 13 October 2010
Yesterday's Index contributed to lift investors' expectations, as it kept on rising, overcoming the 1,186 points, rising by 0.37 points at the beginning of the trading week. As it was seen in the previous days, the international quoted apparel companies performanced far better than the rest of the traded markets, as the FashionUnited Top 100 gained positions compared to other indexes such as the Hang Seng, Nikkei or Dow Jones.

Taking another step to stand forward and letting behind its all live competitor, Nike would become the NFL's exclusive maker of licensed on-field apparel including uniforms, clothing worn on the sidelines and fan gear. Nike replaces Reebok, whose agreement is expiring. Despite the terms of the deal have not been announced yet, the league said its contract with Nike was for five years and would begin in April 2012. This deal lets Reebok aside, as the second largest sports apparel company had a contract expiring after 10 years that was originally worth at least $250 million to the league.

Thus, this has been the last battle in a tough war among the two largest players in the sports-apparel market, and they have battled to secure licensing deals with various professional leagues and top players in tennis, golf and other sports. According to experts and specialized media, this kind of deals to secure the licensing rights with the leagues are expensive. But they often pay for themselves because professional athletes are so ubiquitous that they effectively are billboards for the apparel makers who actively market high-performance gear to consumers.

Also in America, but in a quite different market niche, Gymboree Corp was a stand out in an otherwise thinly traded small and mid cap market on Monday, after the specialty apparel company said it would sell itself to buyout firm Bain Capital Partners.h The 1.8 billion dollar deal drove interest in the specialty retail sector as investors bet other deals may be in the pipeline. Gymboree's shares rose 22.4 percent to $64.83 and the S&P small cap apparel index gained 3.8 percent. In the meanwhile, main foes as Children's Place Retail Stores also benefited from this movement, as it added 2.5%, hitting a year high as rival Carter's Inc. rose 3.2 percent but still remained below.

In Europe, H&M revalidated its title as the beloved one among the high street champions, going up by 2.3 points, while the British retailer M&S received the OK from the investors and rose by 6.5 points. Far from encouraging its stakeholders to rise money in the begining of the week, online retailer ASOS fell yesterday more than 9 points.

Finally, in India, Koutons still goes through troubled waters, awaiting for a firmer explanation on its alleged delayed payment. The Indian retailer failed on Tuesday nearly 3%. In Japan, Asics Corporation dropped by four points, seeing rival Puma AG increasing its position from Germany as adding 1.45 points.

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