Stylish Stocks: Calvin and Tommy lead the way among best-performing fashion brands
Even though people often associate the financial world with black suits, statistics, and little in the way of style, trading does have its fashionable side.
Specifically, fashion stocks. From high-end brands such as Christian Dior and Ralph Lauren to high-street labels like Gap and Zara, retail shares are firmly on investors’ radar recently.
Only yesterday, Mike Ashley’s Frasers Group confirmed it had increased its stake in luxury German fashion brand Hugo Boss, once again, upping its interest to 4.9 per cent, with buy options over another 26 per cent shareholding.
As 90s brands are gaining a second wind in popularity, this trend is not only limited to the fashion conscious.
PVH Corp, whose main products are high-end fashion brands Calvin Klein and Tommy Hilfiger is the only stock in the fashion industry that has performed positively since the start of the year, according to data by CMC Markets, shared exclusively with Morning Wire today.
With an increase of 11.2 per cent since the start of the year, the group also recorded $9.2m in revenue in the last year. Other luxury brands such as LVMH or Dior have seen -17.4 per cent and -19.1 per cent decreases respectively in stock value since January 2022.
Is High Street fashion performing any better?
In short, no. Since the start of the year, companies such as Nike, Zara, Next or H&M have seen an average 31.37 per cent decrease in stock price across the board.
JD Sports plummeted the most with a 44.8 per cent decrease in stock price, not far from gap, sitting at -42.68 per cent year to date.
The lowest decrease in stock price is currently Next with just over 21 per cent. The closure of non-essential retail shops during the pandemic has had a significant impact on high-street fashion brands, as well as online retailers, resulting in British giant Missguided having to go into administration.
However, with shops reopening in April 2021, high-street fashion would have been expected to bounce back. Or has too much been lost at the profit of online fashion retailers?
Fashion retailers
With both luxury and high-street fashion stocks being down, the increase in online retail would push one to think that online fashion retailers are in better shape.
However, when looking at In The Style, Boohoo and ASOS, the results follow the trend of the other fashion markets. Whereas In The Style is “only” 4.35 per cent down since the start of 2022, Boohoo and ASOS recorded -33.12 per cent and -37.16 per cent decline in stock prices respectively.
This begs the question, is there a change in focus in the fashion industry from the customer’s perspective?
Aside from stock performance, what are the consumers actually looking for when buying new outfits?
A Google Trends search showed that in the last 10 years, fast fashion has doubled in interest in the consumer’s mind, resulting in a decrease in both high-street and luxury fashion.
Moreover, sustainable fashion has also gained in interest jumping from 6 per cent to 24 per cent in the space of 10 years.
With sustainable fashion set to become a $8bn dollar market in 2023, is it time to start trading in the sector? Having said that, one shall not forget that both Allbirds and thredUP have seen their stock price plummet over 60 per cent since January 2022.