Bryan Garnier sees French non-food retailers as 2021 lose-lose cases
15/01/2021 09:22
** Bryan Garnier says reinstated lockdowns in Germany, the
Netherlands, the UK, with risk for new ones across Europe don't
bode well for non-food retailers
** "With Q1 usually accounting for 20% of FY sales and 15%
of EBIT for specialized retailers ... the impact of current
lockdowns will not be neutral on operations and on momentum,"
the brokerage says
** Regardless of the COVID situation, it flags French
cultural, electronic products retailer FNAC Darty FNAC.PA ,
home decor shop chain Maisons du Monde (MdM) MDM.PA as
lose-lose cases for 2021
** If the situation worsens, lockdowns will prompt store
closures, but if it gets back to normal, gov't supporting
measures will lessen, while customers' spending will rather
reallocate to travel, leisure than non-essential goods, Bryan
Garnier says
** With valuations above pre-Covid levels, the risk/reward
looks "clearly unattractive" for both names, it says, cutting
FNAC to "sell" from "neutral", and MdM to "neutral" from "buy"
** It keeps "buy" on Media Markt chain owner Ceconomy
CECG.DE , as current lockdowns should be seen as "temporary
attractive entry points to play an appealing transformation
plan"
(piotr.lipinski@tr.com)