After the gloom, festive mood for Mulberry, VFC & Bebe

Wednesday, 21 December 2011

More executive changes shook Mulberry and Hermes, as the British label has gained to its cause Bruno Guillon, currently managing director of the French maison. Meanwhile, LVMH raised its stake in Hermes and Bebe Stores topped early trading at Wall Street.

Analysts at Seeking Alpha have searched for those stocks with positive trends in inventory, within the apparel industry. They have put their eye son those companies with growth in quarterly revenue outpacing growth in quarterly inventory year-over-year. “We also screened for companies with quarterly inventory decreasing as a percent of current assets,” they explain. “To understand why these trends are positive, think of why the opposite trends would be negative. If revenue were growing slower than inventory, it may indicate that the company is having trouble selling its inventory – although this could just indicate inventory building or a change in sales policies.”

In Wall Street, Shares of Bebe Stores (NASDAQ:BEBE) traded Wednesday at $8.48, breaking its 52-week high. Approximately 146,000 shares have changed hands today, as compared to an average 30-day volume of 452,000 shares. According to analysts consulted by FNN, Bebe Stores has potential upside of 7.7% based on a current price of $8.44 and analysts' consensus price target of $9.09. Bebe Stores shares have support at the 50-day moving average (MA) of $7.39 and additional support at the 200-day MA of $6.77. Its stock’s price has moved between a 52-week high of $8.48 and a 52-week low of $5.41 and are now trading 56% above that low price at $8.44 per share. The 200-day and 50-day moving averages have moved 0.53% higher and 1.10% higher over the past week, respectively.

Meanwhile, for Nasdaq’s experts, V.F. Corporation (VFC) holds the 7th position in the ranking of the stocks that have best performed in 2011. It has market cap of $14.37B, total Return: 63.8%. Shares surged in June after the company made moves to buy Timberland Co. for $1.97 billion. VF said in October that it expects 2011 sales to rise 22% to 23%. After a solid performance over the last year, VFC has pulled back during recent sessions.

Wednesday was also an important day for LVMH as France's stock market regulator AMF announced LVMH - already a major shareholder in Hermes - has raised its stake in Hermes International to 23,518,942 shares. Over a year ago, Hermes had to take action to increase the shareholding of the family in ownership of the company when it was revealed LVMH had increased its stake to 17 per cent. The luxury group said it would continue buying up its smaller rival "according to circumstances and the market situation", the news provider stated.

Finally, Mulberry is stepping up its global ambitions by poaching a new chief executive from French fashion house Hermes. Bruno Guillon, currently managing director of Hermes France, has also worked for LVMH and Nina Ricci. He will join in March next year, with Mulberry's current chief executive and chairman Godfrey Davis becoming non-executive chairman after a three month handover period. The company had been looking for a new chief executive since the beginning of the year, and Guillon's experience would help Mulberry in its international growth plans. The company's tightly held shares - controlled by Singaporean billionaire Christina Ong - have jumped 40p to £14.50.

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