The FashionUnited Top 100 Index stands alone in positive
territory whereas most of European benchmark indexes sank dragged by Greek ghosts.
France’s Cac was 6 points down at 3,871, the Ibex in Spain was 6 lower at 10,226, while the Dax was 7 under at 7,278 in Germany. However, the FashionUnited Top 100 Index performed extremely well on Wednesday, contrasting with the European indexes as it climbed by 6.74 points to close at 1310.47.
IN Sweden, second quarter results from fashion retailer Hennes & Mauritz (H&M) were a mixed canvas. Group sales, including value added tax (VAT), and increased by 12% year-on-year in local currencies, with like-for-like sales up 2%. Sales excluding VAT grew to SKr.27,632m from SKr.27,033m in 2010. Post-tax profit slipped to SKr.4,257m from SKr.5,209m the year before, while earnings per share dipped to 2.57 kronor from 3.15 kronor a year earlier. Nevertheless, the share price gained 2.2%.
“We don’t score our business based on gross margin,” said Jyrki Tervonen, chief financial officer for the Swedish retailer. “We saw strong sales growth this quarter in a really tough trading environment and that proves that our strategy is paying off.” In the same vein, H&M said it had gained market share by keeping prices low, while rivals, including Next of the UK, have passed on higher costs to consumers.
European retailers are enduring strained shoppers and rising costs. “What we are seeing is the end of the volume-driven market,” said to Financial Times Richard Hyman, strategic retail adviser to Deloitte. “If you are looking at the whole price and input costs question, the upper end is proving to be more resilient, simply because if you are producing high fashion clothing that you can’t directly compare to last year’s equivalent garment, it is easier to put the prices up without anyone noticing,” added Anne Critchlow, analyst at Société Générale.
Meanwhile, a close eye was kept on Greece after the government survived last night's vote of confidence motion, but that was widely expected and did not provide any sort of lift to European shares. Elsewhere, the Nikkei stock average climbed 1 percent on short-covering on Wednesday, up for a third straight session and pulled by Fast Retailing, among other companies.
In USA American Eagle Outfitters gained 1.61% after announcing a quarterly cash dividend of $0.11 per share, marketing the company's 28th consecutive quarterly dividend. The dividend was declared on June 21, 2011 and is payable on July 22, 2011 to stockholders of record at the close of business on July 8, 2011.