Seeking Alpha: Esprit Holdings Already Priced For A Very Uncertain Recovery

Readers with a little gray at the temples may fondly remember back to a time when Esprit was a popular, or at least relevant, apparel brand in the U.S. A lot has changed since then, and Esprit Holdings (NASDAQ: ESPGY.PK) is now a global wholesale and retail apparel brand with a major presence in Europe and the hope of riding China's middle class to another era of growth. Unfortunately, Esprit has been in a five-year tailspin that has seen serious revenue, margin, and cash flow erosion, as well as the rise of numerous very competitive global retailing concepts. While there is a major discrepancy between the sell-side and buy-side of the Street regarding Esprit's future prospects, it's difficult to make the case that there's enough value here to speculate on a recovery.

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Esprit Holdings Already Priced For A Very Uncertain Recovery

The Vikings Are Coming

Give the Swedes credit - they know what people like when it comes to cheap chic. IKEA has stormed the world with popular (if quirky) flat-pack furniture, and now retailing giant Hennes & Mauritz (Nasdaq:HNNMY) is doing the same in the clothing world. Although H&M is still relatively unknown in the U.S., H&M operates around 2,000 stores around the world and is a major clothing retailer in much of Western Europe. 

The Quarter that Was
H&M continues to post excellent growth as people gravitate toward the company's mix of attractive styling and prices. Total sales were up 14% in the third quarter, with comparable sales up about 11%. The company has opened about 105 new stores so far this year, even though it has mentioned that a slower pace of mall openings has curtailed their near-term store expansion goals somewhat.

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http://stocks.investopedia.com/stock-analysis/2010/The-Vikings-Are-Coming---With-Fashion-HNNMY-ARO-CHS-BKE-GPS1001.aspx