Inditex: still a buyer, BarCap targets 40 euros.
(CercleFinance.com) - In a sector report, BarCap has confirmed buy ("overweight") rating on the Spanish textile distributor Inditex, the parent company of clothes retailer Zara.
It maintains its target price at 40 euros.
In particular, BarCap has examined the supply chains of big names in the sector. Consumers now expect styles presented at fashion shows to be offered in stores "almost immediately". This gives an advantage to the most agile "fast fashion" players: in companies such as Asos, Boohoo or Inditex, the delay could be cut down to two weeks, which is not the case for Zalando, Primark or Marks & Spencer.
Another factor of agility in Inditex's favour is that purchasing decisions are not centralised at the group level at the beginning of the season, but rather are taken by store managers, who have a detailed knowledge of customer demands, collecting "both quantitative and qualitative information from its customers". In short, Inditex knows how to organise close and fast relations between the fashion capitals (London, New York, Milan and Paris), stores that are in contact with customers, and group management. "This way the group effectively captures the current global fashion trends," its report points out.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
It maintains its target price at 40 euros.
In particular, BarCap has examined the supply chains of big names in the sector. Consumers now expect styles presented at fashion shows to be offered in stores "almost immediately". This gives an advantage to the most agile "fast fashion" players: in companies such as Asos, Boohoo or Inditex, the delay could be cut down to two weeks, which is not the case for Zalando, Primark or Marks & Spencer.
Another factor of agility in Inditex's favour is that purchasing decisions are not centralised at the group level at the beginning of the season, but rather are taken by store managers, who have a detailed knowledge of customer demands, collecting "both quantitative and qualitative information from its customers". In short, Inditex knows how to organise close and fast relations between the fashion capitals (London, New York, Milan and Paris), stores that are in contact with customers, and group management. "This way the group effectively captures the current global fashion trends," its report points out.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.