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WHAT LIES AHEAD FOR FASHION BRANDS?

WHAT LIES AHEAD FOR FASHION BRANDS?

H&M, Next and Boohoo Shares Strategies for Coming Months

The CEO of Hennes & Mauritz (HMb.ST) said that the fashion retailer was, convinced it would come out of the crisis stronger.

The group was positive about opportunities to create sustainable and profitable growth.

The H&M group started the year strongly and with a positive momentum until the first wave of COVID-19 had an impact.

Extensive social restrictions involving temporary store closures and large drops in customer footfall to physical stores led to a substantial decrease in sales, particularly in the second quarter.

Retailer Next plc. (NXT.L), gained 1.5 percent as it raised its profit outlook for the 2021-22 year for the second time in two months, driving the main blue-chip index in London.

NEXT reported better than expected first-quarter trading, but cautioned it did not expect a post-lockdown surge in sales to endure.

The fashion chain, which operates some 500 stores as well as an e-commerce channel, said last week full price sales in the 13 weeks to May 1 fell 1.5 percent compared with the same period two years ago – before the COVID-19 pandemic started to disrupt trading last year.

The group’s previous guidance assumed first-quarter sales would tumble 10 percent from the same period in fiscal 2019-20, so they ended up beating this forecast by 75 million pounds.

More positive news came from their sales in the three weeks to May 1, which were up 19 percent versus two years ago, partly reflecting the reopening of the majority of stores on April 12 after over three months of lockdowns.

Another UK’s fashion staple, Boohoo (BOOH.L), reported annual results last week as well.

The online retailer posted a 37 percent jump in annual core earnings, benefiting from the rise in digital shopping during the COVID-19 pandemic and weathering the negative publicity over its supply chain failings.

Boohoo made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 173.6 million pounds in the year to Feb. 28, exceeding analysts’ average forecasts and surpassing by almost 10 million pounds what they made in their 2019-2020 financial year.

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