{"id":68262,"date":"2023-10-03T13:01:03","date_gmt":"2023-10-03T17:01:03","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/boohoo-and-burberry-shares-slide-amid-tough-times-for-british-fashion-brands\/"},"modified":"2023-10-03T13:01:07","modified_gmt":"2023-10-03T17:01:07","slug":"boohoo-and-burberry-shares-slide-amid-tough-times-for-british-fashion-brands","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=68262","title":{"rendered":"Boohoo and Burberry shares slide amid tough times for British fashion brands"},"content":{"rendered":"
\n

British fashion brands were under pressure Tuesday, amid anxiety over a faltering U.K. consumer and slowing global growth for luxury labels.<\/p>\n

Shares in Boohoo
\n BOO,
\n -2.75%<\/bg-quote>
\n stumbled 10% after the fast-fashion retailer said it expected revenues to fall between 12% to 17% in the year to the end of February as active customer numbers declined at double-digit rates.<\/p>\n

\n

The London-listed group, which owns the Debenhams and Karen Millen brands, said the decline in sales would hurt profits in the current financial year, with adjusted earnings before interest, tax, depreciation and amortization falling from the previous forecast range of \u00a369 million-\u00a378 million to between \u00a358 million and \u00a370 million.<\/p>\n

Boohoo shares hit a peak in 2020, amid COVID-induced excitement over online-focused retailers, but have fallen about 90% since.<\/p>\n

\u201cBoohoo, the party\u2019s on hold for now \u2013 the online fashion retailer enjoyed a spectacular run between its IPO in 2014 and 2021, becoming the epitome of fast fashion,\u201d said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. \u201cBut since then, the celebrations have been muted and performance has been lacklustre, to say the least.\u201d<\/p>\n

However, Richard Hunter, head of markets at interactive investor, welcomed management grasping the nettle on expenditure and said some cost headwinds were fading. \u201cBoohoo has become more associated with red flags rather than glad rags, but this latest update at least offers some glimmers of hope,\u201d said Hunter.<\/p>\n

\u201cThe group has recognized that it needs to trim some fat, and has identified \u00a3125 million of annual cost savings over the next two years. At the same time, with the supply chain easing and with lower input prices beginning to filter through, boohoo has been able to pass on some lower prices to customers,\u201d he added.<\/p>\n

And Andrew Wade, analyst at Jefferies, rated Boohoo a buy, though reduced his price target from 85p to 75p, stating: \u201cWe are encouraged by the group\u2019s operational and strategic progress that should support a clear recovery when the demand picture improves. \u201c<\/p>\n

Meanwhile, higher up the fashion price range, Burberry shares
\n BRBY,
\n -3.56%<\/bg-quote>
\n fell more than 3% after UBS downgraded the stock from neutral to sell and clipped its price target from 2,285p to 1,614p.<\/p>\n

Since the appointment of Daniel Lee as the creative director in September 2022, the market has had high hopes for the brand\u2019s new direction, said the UBS research team led by Zuzanna Pusz.<\/p>\n

\u201cHowever, the feedback on the new collection seems muted,\u201d wrote Pusz in a note. \u201cOur discussions with selected wholesalers suggest its price point is too high for the targeted consumer, thus driving a reduction in orders y\/y, while some of the social media trends also don\u2019t suggest any \u2018hype\u2019 among the consumers.\u201d<\/p>\n

This muted reaction to \u201cthe new brand aesthetics\u201d combined with what UBS terms an increasingly challenging sector context, means that the turnaround may have to be more costly to succeed, said Pusz. \u201cWe believe that consensus [earnings] estimates are too high,\u201d she concludes.<\/p>\n

In the broader market, London\u2019s FTSE 100
\n UK:UKX
\n fell 0.1%, helped by banks but hindered by interest-rate sensitive stocks such as utilities as bond yields continued to rise. The DAX
\n DX:DAX
\n in Frankfurt fell 0.8% to its lowest since March as utilities RWE
\n RWE,
\n -3.85%<\/bg-quote>
\n and E.ON
\n EOAN,
\n -2.80%<\/bg-quote>
\n both fell more than 3%. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

British fashion brands were under pressure Tuesday, amid anxiety over a faltering U.K. consumer and slowing global growth for luxury labels. 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