Next, Esprit, Billabong lead trading for apparel stocks

Markets closed mixed Wednesday, with leading fashion and

apparel stocks leading trading in main international trading floors. Next led the losses in the UK, while European-oriented yet Hong Hong-based Esprit feel more than 7 percent. American Esprit and Tom Tailor released corporate figures as well.

In London, shop sales at Next, the British second biggest clothes retailer after Marks & Spencer, slipped by 1.9 percent in the 14 weeks to 4 May, while its online business saw sales soar by nearly 9 percent, leveraging overall group sales up by 2.2 percent. On the back of the news, the stock added 4 percent to 4,601 pence and became the main winner within the FTSE 100.

Despite the increase in online sales, Next has remained cautious about the UK economy, stressing that "We anticipate that the continuing decline in real earnings will depress discretionary spending for at least the next 18 months, if not longer."

Meanwhile, across the Atlantic, John Luttrell, Chief Financial Officer of American Apparel, Inc. stated Wednesday that “Today we reported a 1.4 million dollars improvement in adjusted EBITDA to a loss of 0.7 million dollars for the three months ended March 31, 2013 from a loss of 2.1 million dollars for the three months ended March 31, 2012. Though the first quarter is historically the slowest quarter of the year, retail and online sales growth and the related leveraging of fixed costs helped us reduce our EBITDA loss. These results were substantially in line with plan and, accordingly, we reiterate our adjusted EBITDA guidance of 47 to 54 million dollars for the full year 2013. We expect key initiatives in the areas of merchandise planning, supply chain, and inventory control to drive further sales and expense improvements for the balance of the year.”

In Hong Kong, shares of Esprit, which warned of a substantial loss for the year to June on Thursday, dropped heavily after brokers downgraded the stock. The shares fell as much as 7.3 percent in the morning before closing at 10.38 Hong Kong dollars, down 4.8 percent on a day when the Hang Seng Index rose 0.86 percent, as published local media.

Esprit said in a filing on Monday night that revenue in the three months to March declined 7.9 percent to 6.72 billion Hong Kong dollars. In this vein, the fashion retailer advanced it expected to post a "substantial loss" this financial year because of a larger-than-expected operating loss and an estimated 2.76 billion Hong Kong dollars of provisions and impairments, mainly related to mainland operations.

Finally, Billabong International shares are expected to remain suspended on Thursday´s early trading after takeover talks with Sycamore Partners continued into the night, according to ‘The Australian Financial Review’.

The newspaper says a deal, probably at a price sharply lower than the 60 cents a share that had been offered, is unlikely to be signed by the opening bell on Thursday. The day before, one of Billabong's largest shareholders, Teachers Insurance and Annuity Association (TIAA), revealed it had sold down its 6.2 percent stake to less than the 5 percent required to be considered a substantial holder.