American retailers shake the market

Wednesday, 18 August 2010

Yesterdays, FashionUnited Top 100 Index closed at 1036.15 points, registering a rise of 4.73 points from Mondays 1031.42.

As unveiled in ‘Global Apparel Markets: Business Update, 2nd Quarter 2010’, a research conducted by Research and Markets company, Japanese clothing imports fell by 5.8% during January-April 2010. US clothing imports, on the other hand, were up by 2.4% during January-March 2010. During the same period, Chinese clothing exports were up by 9% but Indian clothing exports declined by 13% in the 11 months to February 2010. Global retail sales of apparel and home textiles made from organically grown cotton increased by 35% in 2009, and are forecast to grow by 20-40% in 2010 and 2011. Clothing market demand in the Americas is predicted to grow by 10.9% per annum between 2009 and 2014, from US$182 billion to US$231 bn.

Regarding the next days, market is expecting earnings surprises as the positive ones already provided by American retailers Abercrombie & Fitch and Urban Outfitters, which beaten average analysts forecasts. Stakeholders are also watching with increasing concern the future of American Apparel, thrown into doubt yesterday after it warned about its ability to continue as a going concern. The US based chic basics retailer expects to make a second quarter loss of between $5m and $7m and cautioned that it may not have “sufficient liquidity” to continue operating for the next year. As the company has reported to be in talks with its lenders to keep on operating, after their second quarter sales are expected to have dropped from $136.1m (£87.2m) last year to between $132m (£84.6m) to $134m (£85.9m) and like-for-like store sales to have fallen by 16%.

In a remarkable descend, G-III Apparel Group fell nearly 30points right after signing a licensing agreement with Jones Jeanswear Division, which will make its foray into the menswear market and keep the rights to design, market and distribute men jeans-wear under several G-III Apparel brand names. In the meanwhile Japanese footwear Asics Corporation lost 4 points after rising continuously for more than two consecutive weeks.

Related News