Better-than-expected quarterly profitsThursday, 09 December 2010
Index closed Wednesday at 1,277.57, helped by Nike's gains
and Japanese companies strengh, what afforded the FashionUnited Top 100 a total gain of 14.25 points. Also better-than-expected GIII Apparel Group quarterly profit helped the index to upper.
The apparel manufacturer, which licenses clothes and accessories under the Calvin Klein, Sean John, Kenneth Cole Productions Inc, Cole Haan, Guess Inc brands, expects to earn $2.73-$2.83 a share for the year, up from its earlier view of $2.60-$2.70 a share. For the third quarter, the New York City-based company earned $42.7 million, or $2.16 a share, while analysts on average were expecting a profit of $2.09, according to Thomson Reuters.
India is slowly waking up to a fashion boom, as advanced former head of Walmart's India operations, Jagannath P, who has launched the Posh fashion brand, and sees a similar boom in apparel and fashion retailing than the one experienced in food retailing. The demand has picked up across small towns in the country. With so much happening, India’s retail sector, often described as ‘risky business’ will soon start to pick momentum, fore say experts. In the meantime, main Indian retailers, gathered in the FU Top 100, were among the worst performances of the day.
But first, some international trade agreements have to be amended, if India wants to take off as a world fashion leader. The American Apparel & Footwear Association (AAFA) just petitioned U.S. Secretary of State Hillary Clinton, U.S. Secretary of Defense Robert Gates, U.S. Secretary of Agriculture Tom Vilsack, U.S. Secretary of Commerce Gary Locke, and U.S. Trade Representative Ron Kirk to take immediate action to stop the government of India from continuing its export ban on cotton or from extending the ban to cotton yarn or other products using cotton.
AAFA President and CEO Kevin M. Burke reminded “The skyrocketing price of cotton has also sent the domestic U.S. apparel, footwear, and textile manufacturing base that supplies the U.S. military into disarray.”“The U.S. workers who outfit our servicemen and women for battle are scrambling to secure enough cotton to meet their obligations under existing contracts and fretting over future contracts that require prices to be stated upfront.”
In Japan, something is going wrong with Yanai’s strategy. Fast Retailing’s shares have plunged 26 percent in 2010, sales at stores open more than a year fell 25 percent in September, continuing to slide through November, and the company forecast its first profit decline in four years for the fiscal year ending in August. “Fast Retailing lost focus on its core products,” said to Bloomberg's Mikihiko Yamato, an analyst at Japaninvest KK in Tokyo. “The company tilted to fashion items that didn’t sell well.” As a sample, just a look on second-half Uniqlo sales: the flagship of the Japanese giant through August fell 6.4 percent in Japan, where Yamaguchi-based Fast Retailing gets more than 80 percent of revenue. November 2010 same-store sales decreased by 14.5% year on year while sales at our own stores decreased by 10.2%. Total sales including online sales increased by 10.4%. As published in an official record by Uniqlo, “In November, our same-store sales fell 14.5% year on year due to the high benchmark set by the previous year's sales. However, due to the success of our sales promotion activities, including the FR Anniversary Sale that ran from November 20, our overall sales were largely in line with our November sales target”.