The financial phenomena of the Apparel, Accessories & Luxury Goods Industry!

The focus of this industry is clearly on the price and the brand conscious people. The industry targets people from the middle income to higher income groups. The demand for this industry has grown exponentially over the years.  It is obvious that high amount of finance is required by companies involved in this industry to cater to the needs of the people. The companies involved in this industry spend millions of dollars in their research and development department in order to come up with products that are in consistent with fashion trends, life styles and the expectations of the consumers. The consumers have seen so much of variety that obviously the consumers associate high expectations with this industry. Hence it is more of an obligation on this industry to live up to the standard of the consumers. The companies involved in the industry often come up with promotional techniques in order to increase sales. Upon the mention of this industry, it is often to mention brand names such as Wal-Mart, H&M, Inditex and GAP which have created their brand names over time.

                Moving on to the market structure of the industry, the structure can be classified as competitive rather than oligopolistic due to many businesses competing in this industry. It is important for the investor to go through the financials of the brands in order to pick the one which is most suitable for portfolio investment. To do so, the stock performances and ratios would be a useful tool for guidance. The company which best fits the requirements of the investor can be chosen for portfolio investment.

            According to the analysis of bidnesetc.com, the analysis of the two companies is listed here. Beginning with the stock performance of Inditex, the stock price started off at EUR 95.82 in last May, however, reached to a level of EUR 107.30 recently, indicating an improvement in the stock performance of the company which reflects that the demand for the stock of the company has risen over time. The company also offers its stockholders to make a high margin for capital gain. The beta for the company is 0.49 which means that for every 10% change in the market return, the company’s return would change by only 4.9%. Hence, this reflects less volatility in the return of the company’s stock which also denotes lower risk. In addition to this, the company has made dividends payments with a dividend per share of EUR 0.95559 which means that the company is also offering return in the form of dividends. Moving on, Wal-Mart Stores, the stock performance has shown an improvement by increasing from $74.84 to $77.01 over the course of a year by showing an improvement of approximately 3%. This clearly indicates that there has been an increase in the demand for Wal-Mart Stores’s stock. Additionally, the company has also increased its per share dividend from $0.47 to $0.48. Similarly, the beta of Wal-Mart Stores is 0.38 which is lower than that of Inditex’s which means the return on Wal-Mart’s stock is much less volatile and hence safer than Inditex’s return. Moreover, the dividend yield on Wal-Mart’s stock is 1.92% and thus offers a reasonable return to its stockholders. Moreover, the stock performance of H&M performed exceptionally well; the stock price was SEK 228 in last May but reached to a level of SEK 281.90. Additionally, the company also made dividend payments equal to SEK 9.50.  Lastly, GAP’s stock also performed well, by increasing in value from $40.55 to $41.44. Additionally the company paid a dividend per share equal to $0.22.