Part of that has to do with the low interest rates and trillions of dollars lawmakers used to prop the suddenly shut-down economy.
And part of it has to do with a change in outlook and attitude. Companies that were constantly chasing the carrot of never-ending growth were forced to stop, re-evaluate and find a new path forward and through the crisis.
That meant big cost cuts, the jettisoning of non-core businesses, fewer promotions, tighter inventories — and a new corporate look that Wall Street investors are keen on.
“This is real,” said Simeon Siegel, stock analyst at BMO Capital Markets, of the retail and fashion rally.
“The pandemic provided an opportunity, for those who took it, to refashion their business for the future,” he said. “It allowed everybody to take a minute and reflect on all the decisions being made. The pandemic stopped inertia.”
Siegel pointed to L Brands Inc., which at least for now is parent to Victoria’s Secret, and Under Armour Inc., which backed away from its bold move in connected fitness, as companies that have made decisive moves.
“They made very public, very expensive admissions of improvement by closing units, by pulling back on promotions, by selling aspects of their businesses that were not core and essentially by deconstructing the late-cycle decisions that were driven by a sole focus on growth without any care for what it costs,” Siegel said.
L Brands’ stock is up 284 percent over the past year while Under Armour is ahead 122 percent.
They’re not alone. Platform darling Farfetch, mall mainstay Gap Inc., and department store Macy’s Inc. have all more than doubled the value of their stocks, despite a world of trouble and a gain of just 55 percent in the Dow Jones Industrial Average.
Here, a look at just how much key players have gained in the market over the past year.
The Pandemic Rally
|Despite the pain of COVID-19, government stimulus and strategic rests have helped fashion stocks.|
|Company||Stock Price 3/12/21||One-year Change|
|Revolve Group Inc.||$47.71||428%|
|L Brands Inc.||$60.81||284%|
|Abercrombie & Fitch Co.||$34.20||240%|
|G-III Apparel Group||$32.49||145%|
|Under Armour Inc.||$19.44||122%|
|Levi Strauss & Co.||$25.14||93%|
|LVMH Moët Hennessy Louis Vuitton||563.40 euros||91%|
|Estée Lauder Companies Inc.||$289.21||85%|
|Lululemon Athletica Inc.||$306.08||81%|
|Hermès International||954.20 euros||71%|
|Burberry Group||21.40 pounds||64%|
|Ralph Lauren Corp.||$123.98||57%|
|Dow Jones Industrial Average||32,777.98||55%|
|Source: Google Finance, Yahoo Finance|
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