LONDON/HONG KONG (Reuters Breakingviews) – Corona Capital is a daily column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.
Caravans of German caravan maker Knaus Tabbert are seen at the consumer trade fair “Caravan Salon” for caravans, motorhomes and camping, which is one of the first fairs that opens for visitors since the coronavirus disease (COVID-19) outbreak, in Dusseldorf, Germany, September 4, 2020.
– Sweatpants effect
– Caravan maker IPO
– Asia business sentiment
SWEATPANTS EFFECT. A rising tide of Air Max trainers is lifting all boats. Nike was the catalyst for a surge in the global athleisure industrial complex as the $182 billion sneaker giant reported an 82% increase in online sales in the three months ending in August. The results, which surpassed analyst forecasts, lifted Nike shares 14% on Tuesday.
Sportswear is a rare retail bright spot. An increase in remote working sparked an 80% lift in sweatpants sales in America in April, according to the New York Times. The trend is set to continue as a new wave of lockdowns means couchbound workers have little need for business wear and fast fashion. This explains why Zara-owner Inditexs shares are down 23% since the beginning of the year while Nikes are up 15%. As Adidas and Puma shares surged 5% on Wednesday, the sportswear boom is showing few signs of waning. (By Aimee Donnellan)
SLOW LANE. Despite virus-driven surges in the popularity of everything from sweatpants to camping, some businesses just cant catch a break. Germanys Knaus Tabbert, Europes third-largest caravan maker, endured a damp squib of a stock market debut on Wednesday, with its shares priced at the bottom end of its 58 euros to 74 euros range, valuing the firm at 600 million euros. And that was after reducing the number of shares on offer by 18%.
The washout is embarrassing for sponsors Jefferies Financial, UniCredit and ABN Amro Bank, who should have had an unusually positive pitch to make. European caravan and motorhome sales jumped 25% from May to July due to flying curbs. And even before the crisis, Knaus Tabbert was on a roll: Last year EBITDA hit 64 million euros, after two years of 9% growth. Investors unconcerned about personal image might want to consider climbing aboard. (By Ed Cropley)
OUT OF THE FIRE. Sentiment at Asian companies is turning positive, according to a Thomson Reuters/INSEAD survey here conducted from end of August to mid-September, and whose respondents included Indian motorcycle maker Hero MotoCorp and Japanese carmaker Suzuki Motor. The Business Sentiment Index for the next six months leapt to 53 compared to a 11-year low of 35 as polled in the previous quarter. Anything above 50 is positive. Companies said they made fewer layoffs too.
Its a welcome relief, but the recovery is cautious at best. Over two-thirds of companies continue to see the pandemic as a top risk. Even in China, for instance, which is ahead of most countries in making a return to pre-Covid-19 ways, retail spending growth is lagging the recovery in other domestic sectors, says Oxford Economics. There are other pressing issues causing angst too, not least the result of the coming U.S. election. Its out of the fire and into the pan. (By Sharon Lam)
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Breakingviews – Corona Capital: Sweats, Campers, Asian confidence – Reuters India
