Fashion retail: Berenberg names ASOS, GFG as top picks
29/09/2020 09:51
** The COVID-19 pandemic should result in a sustainable
step-change in online penetration, according to Berenberg which
names ASOS ASOS.L and Global Fashion Group GFG.DE as its top
picks
** The benefits of large store estates are diminishing
further, negatively affecting Next NXT.L with its about 500 UK
stores, it adds
** Berenberg cuts the stock to "sell" as pandemic has
intensified structural pressures which do not appear to be
captured in the current valuation
** The fashion retail sector has never had a more turbulent
year or faced a more uncertain outlook, the brokerage adds
** It says Zalando ZALG.DE ("sell") could use its recent
EUR 1 bln ($1.17 bln) bond issue in part to fund an expansion in
the UK market in the medium-term which could have particularly
negative consequences for Next's Label business
** The broker sees, however, Primark-owner AB Foods ABF.L
("buy") benefiting from the subdued macroeconomic outlook and
anticipates the company to be one of the first retailers under
its coverage to reinstate dividends
($1 = 0.8568 euros)
((joanna.wodzicka@tr.com))