Chin Up in the Downswing: Luxury Retailers Keep at It in Manhattan; H&M Expected to Post Positive Q1 Numbers; GM Moves Toward Efficiency
by Anne Szustek
Fashion retail, both high-end and budget-conscious, has shown positive developments in terms of expansion and first-quarter profit expectations. GM also said that current economic conditions have forced the company to up its efficiency.
Cheaper leases are inspiring some higher-end retailers to move into or expand their presence in the New York retail market. Among them is Upper East Side luxury accessories store Chrome Hearts, the owner of which told paper amNewYork that “someone recently spent $21,000 on sunglasses in one day.” In the past month British designer Matthew Williamson opened his first U.S. location in New York City’s posh (and high-rent) Meatpacking District. Williamson sales representative Candy Montijo told the paper that despite the currently sluggish sales atmosphere she feels sure about the store’s prospects.
H&M, the Swedish apparel retailer with an international reputation for affordable style, is expected to post growth in earnings for the first quarter of 2009. According to a poll of analysts conducted by Reuters, H&M is expected to post pretax profits for the period covering December through February of 4.1 billion Swedish krona (about $502 million), marking year-on-year growth of just above 1 percent. The chain, which has been home to diffusion lines of several high-end designers, including an upcoming line from Matthew Williamson, expects to open another 225 locations during this fiscal year. Citigroup raised the retail chain’s stock profile to “buy,” citing its sales trends and company efficiency.
GM CEO Rick Wagoner said in a Thursday interview with Bloomberg that the recession—and its deep impact on the auto industry—has forced the company to streamline itself into a more efficient operation. “GM will be leaner and more flexible,” Wagoner told the business news service. “We’re going to have moved significantly to lean out our cost structure and address things that have been competitive disadvantages for years.” Plus the $5 billion U.S. Treasury loan to U.S. auto parts manufacturers approved on Thursday should also help to extend a lifeline to GM as it negotiates with the United Auto Workers and bondholders over its debt. GM stock went up 8.7 percent, or $0.23, to $2.87 during Thursday trading, its highest price since Feb. 2.