Stagflation's threat drag fashion stocks

Thursday, 24 February 2011

FashionUnited Top 100 Index was not able to escape the stagflation threat ad closed Thursday at 1,247.77 with a final drop of 9.31 points. Most hit values were IC Company, Ted Baker, Coach, Tiffany & Co and Fossil.

Oil rocketing prices and disappointing corporate results dominated trading in European equities on Thursday morning as stocks fell steadily for a fourth consecutive session. The FTSE 100 index of leading British shares was down 0.3 percent at 5,908 while Germany's DAX fell 1 percent to 7,121. The CAC-40 in Paris was 0.1 percent lower at 4,008.Wall Street was poised for another retreat at the open when Dow futures were down 16 points at 12,078 while the broader Standard & Poor's 500 futures fell 3.5 points to 1,302.20.

Concerns about Libyan revolutionaries also hit stocks in Australia, which traded lower as investors worry that continued turmoil in Libya and the Middle East will keep oil near $100 a barrel and hurt the nascent economic recovery in the rest of the world. From the Antipodes, Pacific Brands reported first-half declined after it wrote down assets and took a restructuring charge of $9.4 million. The company declared net loss of $166 million on write-down of $175 million. The net profit a year ago was $22 million. Sales declined to $852 million and excluding the discontinued businesses fell only 2.3%. Underlying profit in the period rose 64% to $58 million as the company shifted most of its production to China and increased operating margins. The weak results cost the Australian retailer a drop of 12.24% within the FashionUnited Top 100 Index.

Danish fashion firm IC Companys couldn´t scape yet from the losers team, where has been for two weeks already. The Nordic firm said early this month its net profit shrank 43% on the year to DKK26m in its second fiscal quarter to 31 December 2010 pulled down by big non-recurring costs. The result includes one-off costs of DKK16m related to a new organizational and logistics structure, announced in November 2010.

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