European Apparel Retail: Credit Suisse prefers online retailers
19/05/2021 08:51
** Credit Suisse prefers pure online players like Zalando
ZALG.DE and ASOS ASOS.L in the European clothing sector over
multi-channel groups, saying there is "sufficient evidence to be
optimistic that online retailers will hold on to market share"
following recent strong gains
** Multi-channel retailers such as Inditex ITX.MC , H&M
HMb.ST and Next NXT.L have been strong this year as stores
start to reopen from coronavirus lockdowns, CS notes
** However, the broker adds that, compared with U.S.
stimulus cheques, the re-deployment of high savings rates in
Europe may see a different pattern of expenditure
** It raises Zalando to "outperform" from "neutral" on
valuation grounds, seeing a potential guidance upgrade
** It expects an overhang of shares from Kinnevik's transfer
of a stake in Zalando to its shareholders to be absorbed
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** It reiterates "underperform" ratings for H&M, Inditex and
Next, a "neutral" rating for Boohoo BOOH.L , and confirms
British online fashion retailer ASOS ("outperform") as its top
pick
** It notes online retailers have de-rated so far this year
by between 10% and 24%, trading on historically attractive
current year multiples
((Linda.pasquini@thomsonreuters.com))