MGFB35: Fashion Stocks Surge Past 30,000 Points Threshold Again

Fashion regains strength on the international stock markets. The Modaes Global Fashion Benchmark (MGFB35) closed the tenth month of the year with a rise of 7.28%, well above the 0.42% growth recorded in September. With October’s figure, the performance of MGFB35 companies accumulates its third consecutive increase and the fourth so far this year, which began in January with a rise of 9.2%.

The indicator, which measures the evolution of the aggregate capitalization of the 35 most representative companies in the fashion sector on a global scale, has thus reached 31,564 points, surpassing the 30. Fashion, however, had been falling since February, a negative trend which it did not abandon until August of this year.

The evolution of the euro in the foreign exchange market has had a positive effect on the sector, since at constant exchange rates, i.e. discounting the effect of currency fluctuations, fashion would have closed October with a rise of 7.1%. The good performance of the MGFB35 goes hand in hand with the context of recovery on the international stock markets. Specifically, the Dow Jones, the benchmark index in the United States, ended the tenth month of the year up 2.69%. 

The biggest rise in October in the MGFB35 corresponds to the Japanese company Fast Retailing, Uniqlo’s parent company, which closed the month with a positive performance of 24.3% over the previous month. October was a month of good news for the company, in which it announced record results for its fiscal year (ended in August), with sales of more than €19 billion and earning 16% more than in the previous year.

The French luxury conglomerate LVMH, which also presented its results in October, also rose by 18.69% on the stock exchange compared to the previous month, boosted by better-than-expected results at the end of its first nine months . EssilorLuxottica , meanwhile, is up 16.78%, while Swatch, Estee Lauder and Kering complete the double-digit increases, with rises of more than 11% in all three cases.

The good performance of the MGFB35 is due to the positive performance of most of the companies in the indicator. At the end of October, a total of 21 companies ended the period with a higher valuation than in September. U.S. giant Macy’s, British icon Burberry and Richemont also stand out with rises of 8.28%, 7.75% and 6.4%, respectively.

Almost all the companies in the retail sector are up, while sport falls

In the opposite direction, however, the performance of up to 14 companies has also fallen, with Asos being the worst performer. The British ecommerce group has lost up to 14.6% of its value on the stock market in October, followed by Levi Strauss and Birkenstock, which recorded falls of 11.9% and 11.13%, respectively. The other company that closed October with a double-digit drop was China’s Anta, down 10.89% on the stock market compared to September.

In the group of Spanish listed companies, the three companies present in the MGFB35 recorded a similar evolution. Puig leads the growth, with a valuation on the stock exchange 6.36% higher than in the previous month, followed by Inditex, which is 5.72% higher. Adolfo Domínguez, on the other hand, recorded a 4.77% increase in its market value.

Along with Fast Retailing, this month’s leader on the stock market, and Inditex, most of the large fashion retailers also recorded positive developments. H&M, for one, increased its stock market value by 4.22% since September, while Gap increased by another 3.9%. The stock market valuations of VF Corporation and PVH have fallen, by 4.68% and 9.74%, respectively.

In the sports industry, the behavior is quite the opposite, with falls in the sector’s major icons. Along with the Chinese sports equipment and fashion giant Anta, Germany’s Adidas closed October by losing 9.15% of its stock market value, and the U.S.-based Nike by another 6.81%. Dick’s, which barely entered the MGFB35 last month, debuted on the indicator with a fall of 2.99% compared to September.

Updated monthly by Modaes, the MGFB35 is the result of multiplying the previous month’s value by dividing the sum of the current month’s market capitalizations in euros of the 35 companies that make up the selective by the sum of the previous month’s capitalizations, taking into account a corrective factor if there are changes in the number of shares. The MGFB35 was launched in September 2011, with a trading base of 10,000 points.