FashionUnited Top 100 Index closed Thursday 1.112, nearly to 4 points above previous session.

Fashion market was shacked by Under Armour radical change of core strategy, model behaviour from Abercrombie and H&M corporate report.

H&M Thursday posted a lower-than-expected net profit for the fourth quarter as it was hit by the strong Swedish krona and rising cotton prices, but said it still plans to open a further 250 stores in fiscal 2011. The company said the stronger Swedish krona, which has strengthened about 14% against the euro and about 12% against the U.S. dollar over the last year has hit sales and profits.

The company reports sales in Swedish krona, but generates the majority of its sales in other currencies, with about 60% of its sales in euros. Soaring cotton prices have also been problematic for the retailer. The group’s sales excluding VAT increased by 15 percent in local currencies, converted into SEK, the increase was 7 percent and sales amounted to SEK 108,483 m (101,393). Despite the downing figures, the stock was trading up by 0.05% yesterday.

But if there is a company that is in everyone's mouth within the industry these days is Under Armour. Since its IPO, revenue has grown 32% annually, and shares have gone from $31 to $56. The stock is up 107% since last year. After 14 years hating cotton and defending sintetic fabrics, Under Armour announces to introduce a new line of T-shirts, enterely in cotton. The move makes financial sense. Compared to other stocks listed in the FU Top 100, Under Armour was at the tail of the top 5 winners Thursday, with a final gain of 3.65%.

According to Michael Binetti, an apparel analyst at UBS consulted by Forbes, the U.S. cotton activewear market is $12 billion, four times the size of the performance wear market that Under Armour was limited to with its synthetic- only line. "I think this could make for a big 2011 for them," says Binetti. He foresees 24% growth in Under Armour's apparel business, which, at $652 million in 2009, made up 76% of its total revenues of $856 million (from which Under Armour netted $46 million). The company's revenues passed the $1 billion mark for 2010. (Plank is the company's biggest shareholder and has majority voting control, owning all 12.5 million of Under Armour's Class B shares, currently worth $700 million.). Other companies benefiting from Under Armour success were to be found in the athletic apparel group, with Puma, Nike and Lululemon Athletica closing with gains.

Finally, Trefis' price estimate for Abercrombie & Fitch stock is $53.34, roughly 6% above market price. We estimate that A&F Stores account for 37% of the company's stock value compared to 29% for Hollister stores. The Internet & Catalog Orders contribute around 19%. In America, December has been a mixed month for retailers, with some retailers like Gap and American Eagle failing to meet expectations while others like Abercrombie & Fitch doing well. Overall, comparable store sales for retailers increased by only 3.1%, slightly lower than Wall Street's forecast. These achievements afforded the high street hype an extra 0.48% in the trading floor.




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