Danish billionaire Anders Holch Povlsen lost three of his four children in the<a href="https://www.wionews.com/south-asia/sri-lanka-bombings-were-revenge-for-christchurch-mosque-shootings-says-defence-minister-212848"> Easter day attacks in Sri Lanka</a>, a spokesman for his clothing retail group Bestseller said on Monday.

Danish media have reported that Holch Povlsen, his wife Anne and their four children were in <a href="https://www.wionews.com/south-asia/sri-lanka-bombings-death-toll-from-terror-attack-rises-to-310-40-people-arrested-212788">Sri Lanka</a> on vacation at the moment of the attacks, which struck churches and luxury hotels killing over 300 people.

"I can confirm that three children have been killed," Jesper Stubkier, the communications manager for Bestseller, said in a statement.

"We ask you to respect the privacy of the family and we, therefore, have no further comments."&nbsp;

Considered to be Denmark's richest man, 46-year-old Holch Povlsen is the main shareholder in the online fashion retailer ASOS as well as the owner of Bestseller.&nbsp;

He inherited Bestseller from his parents who founded the firm in 1975.

The group, which includes brands such as Vero Moda, Only and Jack &amp; Jones, has more than 3,000 stores in 70 countries.

In addition to the majority stake in Britain-based ASOS, Holch Povlsen also owns an interest in its German rival Zalando.

The billionaire also describes himself as "one of Scotland's largest landowners" on the website of the Wildland company he uses to invest in UK property.

"We wish to restore our parts of the (Scotland) Highlands to their former magnificent natural state and repair the harm that man has inflicted on them," Holch Povlsen and his wife say on the website.

"There are many vulnerable properties across all of the holdings that we have the wonderful and privileged opportunity to rehabilitate and restore to life."

Sri Lankan officials said Monday they believe that the local Islamist extremist group National Thowheeth Jama'ath (NTJ) was behind the attacks.

Dozens of foreigners are among those killed, while some 500 people were injured.&nbsp;

Danish billionaire Anders Holch Povlsen lost three of his four children in the Easter day attacks in Sri Lanka, a spokesman for his clothing retail group Bestseller said on Monday.

Danish billionaire Anders Holch Povlsen lost three of his four children in the Easter day attacks in Sri Lanka, a spokesman for his clothing retail group Bestseller said on Monday. Danish media have reported that Holch Povlsen, his wife Anne and their four children were in Sri Lanka on vacation at the moment of the attacks, which struck churches and luxury hotels killing over 300 people. "I can confirm that three children have been killed," Jesper Stubkier, the communications manager for Bestseller, said in a statement. "We ask you to respect the privacy of the family and we, therefore, have no further comments." Considered to be Denmark's richest man, 46-year-old Holch Povlsen is the main shareholder in the online fashion retailer ASOS as well as the owner of Bestseller. He inherited Bestseller from his parents who founded the firm in 1975. The group, which includes brands such as Vero Moda, Only and Jack & Jones, has more than 3,000 stores in 70 countries. In addition to the majority stake in Britain-based ASOS, Holch Povlsen also owns an interest in its German rival Zalando. The billionaire also describes himself as "one of Scotland's largest landowners" on the website of the Wildland company he uses to invest in UK property. "We wish to restore our parts of the (Scotland) Highlands to their former magnificent natural state and repair the harm that man has inflicted on them," Holch Povlsen and his wife say on the website. "There are many vulnerable properties across all of the holdings that we have the wonderful and privileged opportunity to rehabilitate and restore to life." Sri Lankan officials said Monday they believe that the local Islamist extremist group National Thowheeth Jama'ath (NTJ) was behind the attacks. Dozens of foreigners are among those killed, while some 500 people were injured.

Danish billionaire Povlsen loses three children out of four in Sri Lanka blasts

<a href="http://www.wionews.com/business-economy/asian-markets-rise-ahead-of-key-meetings-in-china-and-us-184789">Asian share markets </a>slumped on Tuesday as heightened concerns about a <a href="http://www.wionews.com/business-economy/imf-says-trade-war-already-hurting-asia-may-cut-global-growth-forecasts-184777">slowing global economy</a> sent Wall Street stocks skidding to their lowest levels in more than a year.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.3 per cent in mid-morning trade while Japan's Nikkei tumbled 1.2 per cent by the midday break.

Chinese shares opened in negative territory with the blue-chip index down 0.3 per cent and Hong Kong's Hang Seng index flat, while Australian shares fell 0.8 per cent.

MSCI's broadest gauge of the world's stock markets, ACWI, was down 0.05 per cent on Tuesday, after having hit its weakest level since May 2017 the previous day. It has declined 16 per cent from a top hit on January 29.

US stock futures rose 0.4 per cent in Asia following the previous session's sharp sell-off.

On Monday, the S&amp;P 500 lost 2.08 per cent to hit its lowest since October 2017 as it breached lows reached during a sell-off in February, having wiped out about $3.4 trillion of market value since late September.

The Nasdaq Composite dropped 2.27 per cent, with Amazon, one of the best performing shares this year, sliding 4.5 per cent.

A profit warning from ASOS, a previously high-flying UK online-clothing retailer, shocked investors, sending US consumer discretionary shares down 2.8 per cent

"US retailers have been stocking up consumer goods from China before hikes in tariff, piling up inventories. From now their costs are seen rising next year. That may have been kind of known to everyone but it's becoming reality," said Tatsushi Maeno, senior strategist at Okasan Asset Management.

In addition, the National Association of Home Builders Housing Market Index indicated U.S. homebuilder sentiment had fallen to a three-and-a-half-year low. It was the second consecutive month of disappointing reading.

The gloomy data came after weak economic news from China and Europe late last week.

The 10-year US&nbsp;Treasuries yield dropped to 2.853 per cent, edging near a Dec. 10 low of 2.825 per cent, its lowest level since late August.

FOCUS SHIFTS TO FED

The Federal Reserve is widely expected to raise interest rates on Wednesday, which would be its fourth hike this year.

But many investors now expect signs of economic turbulence to prompt the Fed to signal a slowdown in the pace of tightening next year.

On Monday, US President Donald Trump and his top trade adviser ratcheted up their criticism of the central bank's monetary tightening.

"It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!" Trump wrote in a tweet.

White House trade adviser Peter Navarro amplified those remarks a few hours later, calling the Fed "crazy" for having signalled that it would continue to raise rates next year.

The Fed said in September that its policymakers see three more rate hikes in 2019 while money market futures are pricing in less than one such move.

"The major event between now and the end of the year is going to be what the Fed does tomorrow," said Jim McCafferty, Hong Kong-based head of Asia-ex-Japan equity research at Nomura.

"Given the pace of change of sentiment seen from not just companies but (also) from major macro-economies, I think there might be an outside chance that the Fed gives a more muted message in terms of growth and how aggressive it will be in terms of future rate hikes," he added.

The spectre of a "dovish rate hike" kept the dollar in check.

The euro traded slightly higher at $1.1355, after having gained 0.40 per cent on Monday.

The greenback gave up 0.1 per cent against the Japanese yen to 112.70 yen, adding to Monday's fall of nearly half a per cent.

The offshore Chinese yuan was slightly stronger at 6.8900 to the dollar.

Investors are awaiting details of a speech by President Xi Jinping to mark the 40th anniversary of China's market reforms.

China is also expected to hold its annual Central Economic Work Conference later this week, where key growth targets and policy goals for 2019 will be discussed.

Oil prices extended losses on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over global economic growth and fuel demand.

<a href="http://www.wionews.com/business-economy/rupee-rises-37-paise-to-7119-against-us-dollar-on-falling-crude-prices-184949">US crude fell as low</a> as $49.01 per barrel on Monday, its lowest since September last year and last stood at $49.37, down 1.0 per cent on the day.

Brent crude oil futures lost 65 cents, or 1.1 percent, to $58.96 per barrel.

Asian share markets slumped on Tuesday as heightened concerns about a slowing global economy sent Wall Street stocks skidding to their lowest levels in more than a year.

Asian share markets slumped on Tuesday as heightened concerns about a slowing global economy sent Wall Street stocks skidding to their lowest levels in more than a year. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.3 per cent in mid-morning trade while Japan's Nikkei tumbled 1.2 per cent by the midday break. Chinese shares opened in negative territory with the blue-chip index down 0.3 per cent and Hong Kong's Hang Seng index flat, while Australian shares fell 0.8 per cent. MSCI's broadest gauge of the world's stock markets, ACWI, was down 0.05 per cent on Tuesday, after having hit its weakest level since May 2017 the previous day. It has declined 16 per cent from a top hit on January 29. US stock futures rose 0.4 per cent in Asia following the previous session's sharp sell-off. On Monday, the S&P 500 lost 2.08 per cent to hit its lowest since October 2017 as it breached lows reached during a sell-off in February, having wiped out about $3.4 trillion of market value since late September. The Nasdaq Composite dropped 2.27 per cent, with Amazon, one of the best performing shares this year, sliding 4.5 per cent. A profit warning from ASOS, a previously high-flying UK online-clothing retailer, shocked investors, sending US consumer discretionary shares down 2.8 per cent "US retailers have been stocking up consumer goods from China before hikes in tariff, piling up inventories. From now their costs are seen rising next year. That may have been kind of known to everyone but it's becoming reality," said Tatsushi Maeno, senior strategist at Okasan Asset Management. In addition, the National Association of Home Builders Housing Market Index indicated U.S. homebuilder sentiment had fallen to a three-and-a-half-year low. It was the second consecutive month of disappointing reading. The gloomy data came after weak economic news from China and Europe late last week. The 10-year US Treasuries yield dropped to 2.853 per cent, edging near a Dec. 10 low of 2.825 per cent, its lowest level since late August. FOCUS SHIFTS TO FED The Federal Reserve is widely expected to raise interest rates on Wednesday, which would be its fourth hike this year. But many investors now expect signs of economic turbulence to prompt the Fed to signal a slowdown in the pace of tightening next year. On Monday, US President Donald Trump and his top trade adviser ratcheted up their criticism of the central bank's monetary tightening. "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!" Trump wrote in a tweet. White House trade adviser Peter Navarro amplified those remarks a few hours later, calling the Fed "crazy" for having signalled that it would continue to raise rates next year. The Fed said in September that its policymakers see three more rate hikes in 2019 while money market futures are pricing in less than one such move. "The major event between now and the end of the year is going to be what the Fed does tomorrow," said Jim McCafferty, Hong Kong-based head of Asia-ex-Japan equity research at Nomura. "Given the pace of change of sentiment seen from not just companies but (also) from major macro-economies, I think there might be an outside chance that the Fed gives a more muted message in terms of growth and how aggressive it will be in terms of future rate hikes," he added. The spectre of a "dovish rate hike" kept the dollar in check. The euro traded slightly higher at $1.1355, after having gained 0.40 per cent on Monday. The greenback gave up 0.1 per cent against the Japanese yen to 112.70 yen, adding to Monday's fall of nearly half a per cent. The offshore Chinese yuan was slightly stronger at 6.8900 to the dollar. Investors are awaiting details of a speech by President Xi Jinping to mark the 40th anniversary of China's market reforms. China is also expected to hold its annual Central Economic Work Conference later this week, where key growth targets and policy goals for 2019 will be discussed. Oil prices extended losses on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over global economic growth and fuel demand. US crude fell as low as $49.01 per barrel on Monday, its lowest since September last year and last stood at $49.37, down 1.0 per cent on the day. Brent crude oil futures lost 65 cents, or 1.1 percent, to $58.96 per barrel.

Asia stocks slide as global growth worries deepen

Online fashion retailer, ASOS made a blunder when it mistakenly printed 17,000 of its bags with a typo on them.

Their slogan, &lsquo;discover fashion online&rsquo;, had the word &lsquo;onilne&rsquo; instead of &lsquo;online&rsquo;.

However, they owned up to this mistake and tweeted a picture of the plastic bag on Twitter alongside the caption, &ldquo;Ok, so we *may* have printed 17,000 bags with a typo.&quot;

&ldquo;We&rsquo;re calling it a limited edition,&rdquo; they further wrote.

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Ok, so we *may* have printed 17,000 bags with a typo. We&rsquo;re calling it a limited edition. <a href="https://t.co/wTpKNid4V5">pic.twitter.com/wTpKNid4V5</a>
&mdash; ASOS (@ASOS) <a href="https://twitter.com/ASOS/status/976401027468537856?ref_src=twsrc%5Etfw">March 21, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

Since posting the image, it has received more than 46,000 likes and 7,000 retweets while fans of the retailer have flooded it with comments.

ASOS shoppers seemed impressed by the company&#39;s honesty and sense of humor about what could&#39;ve been a pretty embarrassing moment, with many joking on Twitter. &nbsp;

<div class="ui-state-default" contenteditable="false">
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<blockquote class="twitter-tweet" data-lang="en">
Glad you&#39;re a fan Melissa, we all make mistakes eh?
&mdash; ASOS (@ASOS) <a href="https://twitter.com/ASOS/status/976537474905333760?ref_src=twsrc%5Etfw">March 21, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
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<blockquote class="twitter-tweet" data-conversation="none" data-lang="en">
Along with the humorous attitude, I appreciate that they are not landfilling something that is perfectly functional to &quot;protect their brand.&quot;
&mdash; S (@IntDesgnrBoston) <a href="https://twitter.com/IntDesgnrBoston/status/976554411177775105?ref_src=twsrc%5Etfw">March 21, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
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<blockquote class="twitter-tweet" data-conversation="none" data-lang="en">
I work in fashion as well....I think we&#39;ve had our share of typos like &quot;shite shirt&quot; instead of &quot;white shirt&quot; ???????? <a href="https://t.co/yWVI4bPqTc">pic.twitter.com/yWVI4bPqTc</a>
&mdash; Michelle Lauritzen (@MELauritzen) <a href="https://twitter.com/MELauritzen/status/976416055387197440?ref_src=twsrc%5Etfw">March 21, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
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&nbsp;

Online fashion retailer, ASOS made a blunder when it mistakenly printed 17,000 of its bags with a typo on them

Online fashion retailer, ASOS made a blunder when it mistakenly printed 17,000 of its bags with a typo on them. Their slogan, ‘discover fashion online’, had the word ‘onilne’ instead of ‘online’. However, they owned up to this mistake and tweeted a picture of the plastic bag on Twitter alongside the caption, “Ok, so we *may* have printed 17,000 bags with a typo." “We’re calling it a limited edition,” they further wrote. Ok, so we *may* have printed 17,000 bags with a typo. We’re calling it a limited edition. pic.twitter.com/wTpKNid4V5 — ASOS (@ASOS) March 21, 2018 × Since posting the image, it has received more than 46,000 likes and 7,000 retweets while fans of the retailer have flooded it with comments. ASOS shoppers seemed impressed by the company's honesty and sense of humor about what could've been a pretty embarrassing moment, with many joking on Twitter. Glad you're a fan Melissa, we all make mistakes eh? — ASOS (@ASOS) March 21, 2018 × Along with the humorous attitude, I appreciate that they are not landfilling something that is perfectly functional to "protect their brand." — S (@IntDesgnrBoston) March 21, 2018 × I work in fashion as well....I think we've had our share of typos like "shite shirt" instead of "white shirt" ???????? pic.twitter.com/yWVI4bPqTc — Michelle Lauritzen (@MELauritzen) March 21, 2018 ×

Major fashion retailer prints 17,000 bags with typo

Already hamstrung by the battle to compete with online rivals, Britain&#39;s major clothing retailers now risk a hit to sales and profits from the higher costs and plummeting consumer confidence that have followed the vote to leave the European Union. 
 
A month after that vote, clothing sellers are nursing big share price falls and contemplating the cost of the depreciation in the Pound versus their most important currency, the US Dollar. 
 
At the same time, consumer confidence has recorded one of the biggest drops in over two decades. With consumer spending accounting for three quarters of Britain&#39;s gross domestic product any drop would have huge implications for the economy. 
 
While a few retailers with big overseas earnings could benefit from the currency move, such as luxury brand Burberry, online fashion retailer ASOS and discount chain Primark, those that will struggle are likely to be British-focused and with already tight margins. 
 
&quot;It was already a tough market,&quot; Andy Street, managing director of John Lewis, Britain&#39;s biggest department store chain, said earlier this month, while Steve Rowe, CEO of Marks &amp; Spencer, the nation&#39;s biggest clothing retailer, described confidence as &quot;fragile&quot;. 
 
While steps by clothing retailers to protect themselves from volatility in foreign exchange rates through hedging will provide some breathing space on the currency issue, the hit to confidence is the more immediate threat, as Britons typically curtail clothes shopping in hard times. 
 
Market researcher Nielsen polled shoppers after the Brexit vote and found 41 per cent planned to change their spending habits to save on household expenses, with clothing and expensive grocery brands in their sights. 
 
In common with all British retailers, clothing sellers were already grappling with intense competition from online-only players and the cost inflation implications of the government-mandated minimum pay rate, the national living wage, as well as increased business rates. 
 
Official data today showed UK clothing sales were falling even before the referendum. Sales volumes in the three months to June were 5 per cent lower than a year earlier, the worst performance for any calendar quarter in 25 years, and in sharp contrast to a buoyant picture for most other categories of retail. 
 
Now clothing retailers also have to deal with a sharply depreciated Pound.&nbsp;Sterling has taken the brunt of market concern since the Brexit vote on June 23, falling to a 31-year low and trading below $1.28 on July 6 against $1.50 the day before the referendum. 
 
With the bulk of British clothing retailers&#39; goods sourced from Asian suppliers and paid for in Dollars, a weaker Pound has a major impact on their buying costs. 
 
Britain&#39;s biggest clothing retailers, including M&amp;S, Next and John Lewis, are hedged up to 18 months ahead, meaning that if Sterling stays depressed the main impact will not start to be felt until the second half of their 2017-18 financial year. 
 
Sportswear retailer Sports Direct is the notable exception, being unhedged for Sterling-Dollar for its 2016-17 year. Its share price is down 32 per cent since the vote. 
 
Clothing companies would normally be expected to hedge for the second half of 2017-18 and beyond, now and over the next few months.&nbsp;But with foreign currency markets volatile, the treasury departments of firms are reviewing their hedging policies. 
 
They face a dilemma, explained a senior banker with several major British retailers as clients, because as UK interest rates look set to be cut there is a risk Sterling could fall further.&nbsp;&quot;Now might not be the right time to do it, equally waiting might not be the right thing to do,&quot; he said. 
 
That unease was echoed by a person with knowledge of the situation at a FTSE 100 clothing retailer.&nbsp;&quot;You don&rsquo;t want to be making a decision in July to hedge for 18 months time, because nobody knows what&rsquo;s going to happen. You could put yourself in a worse position,&quot; said the person, adding that only the brave would start hedging now. 
 
Faced with higher sourcing costs one solution could be to pass those costs on to consumers through higher prices.&nbsp;However, in an already weak market shoppers will have little appetite for inflation, and in the case of M&amp;S, raising prices would run counter to Rowe&#39;s stated strategy of bringing them down to cure the firm&#39;s perceived uncompetitiveness. 
 
The average price of clothing has fallen by 15 per cent in the last 10 years, according to official UK data.&nbsp;The key for clothing retailers will be their ability to mitigate the cost increases they face. 
 
&quot;There are a number of things that we can do in terms of the sourcing side of things,&quot; said Helen Weir, M&amp;S&#39; chief finance officer, noting the firm imports 1 billion to 1.5 billion Pounds ($1.31-$1.97 billion) worth of goods each year in Dollars. 
 
Options include changing the mix of sourcing countries and further increasing the proportion of direct sourcing from factories, cutting out middlemen.&nbsp;Also there might be scope to re-negotiate better terms with suppliers as Asian currencies have depreciated against the Dollar. 
 
Bankers say more radical options would require a cultural shift at retailers.&nbsp;They could pursue &quot;dual pricing&quot;, where they negotiate part payment for supplies in different currencies from the Dollar, for example using the Chinese Renminbi. 
 
Retailers could also collaborate more on ordering, shipping and warehousing to seek economy of scale savings.&nbsp;But efficiencies might be more difficult to achieve than in previous years. 
 
&quot;Companies have already materially improved their gross margins through better buying and efficiencies on the supply side,&quot; said Ernesto Bisagno, senior analyst at ratings agency Moody&#39;s. 
 
Ultimately the clothing sellers with the biggest margins will be best able to weather the storm.&nbsp;Here, Next, Britain&#39;s most successful clothing retailer of the last decade, is the stand-out stock, with an operating margin for 2015-16 of 20.8 per cent, according to Reuters data. 
 
That dwarfs M&amp;S on 7.4 per cent, which is diluted by half of its business being in the lower-margin food sector, Debenhams on 5.8 per cent (for 2014-15), Sports Direct on 9.4 per cent and Primark on 11.9 per cent (for its most recent quarter). 
 
Led by Simon Wolfson, who was among the leading business supporters of Brexit, Next should be well prepared. With some foresight, he had warned in March that 2016 could be its toughest year since 2008. 
 
(Reuters)

Clothing retailers fear volatility in foreign exchange rates, and Britons typically buy less clothes in hard times

Already hamstrung by the battle to compete with online rivals, Britain's major clothing retailers now risk a hit to sales and profits from the higher costs and plummeting consumer confidence that have followed the vote to leave the European Union. A month after that vote, clothing sellers are nursing big share price falls and contemplating the cost of the depreciation in the Pound versus their most important currency, the US Dollar. At the same time, consumer confidence has recorded one of the biggest drops in over two decades. With consumer spending accounting for three quarters of Britain's gross domestic product any drop would have huge implications for the economy. While a few retailers with big overseas earnings could benefit from the currency move, such as luxury brand Burberry, online fashion retailer ASOS and discount chain Primark, those that will struggle are likely to be British-focused and with already tight margins. "It was already a tough market," Andy Street, managing director of John Lewis, Britain's biggest department store chain, said earlier this month, while Steve Rowe, CEO of Marks & Spencer, the nation's biggest clothing retailer, described confidence as "fragile". While steps by clothing retailers to protect themselves from volatility in foreign exchange rates through hedging will provide some breathing space on the currency issue, the hit to confidence is the more immediate threat, as Britons typically curtail clothes shopping in hard times. Market researcher Nielsen polled shoppers after the Brexit vote and found 41 per cent planned to change their spending habits to save on household expenses, with clothing and expensive grocery brands in their sights. In common with all British retailers, clothing sellers were already grappling with intense competition from online-only players and the cost inflation implications of the government-mandated minimum pay rate, the national living wage, as well as increased business rates. Official data today showed UK clothing sales were falling even before the referendum. Sales volumes in the three months to June were 5 per cent lower than a year earlier, the worst performance for any calendar quarter in 25 years, and in sharp contrast to a buoyant picture for most other categories of retail. Now clothing retailers also have to deal with a sharply depreciated Pound. Sterling has taken the brunt of market concern since the Brexit vote on June 23, falling to a 31-year low and trading below $1.28 on July 6 against $1.50 the day before the referendum. With the bulk of British clothing retailers' goods sourced from Asian suppliers and paid for in Dollars, a weaker Pound has a major impact on their buying costs. Britain's biggest clothing retailers, including M&S, Next and John Lewis, are hedged up to 18 months ahead, meaning that if Sterling stays depressed the main impact will not start to be felt until the second half of their 2017-18 financial year. Sportswear retailer Sports Direct is the notable exception, being unhedged for Sterling-Dollar for its 2016-17 year. Its share price is down 32 per cent since the vote. Clothing companies would normally be expected to hedge for the second half of 2017-18 and beyond, now and over the next few months. But with foreign currency markets volatile, the treasury departments of firms are reviewing their hedging policies. They face a dilemma, explained a senior banker with several major British retailers as clients, because as UK interest rates look set to be cut there is a risk Sterling could fall further. "Now might not be the right time to do it, equally waiting might not be the right thing to do," he said. That unease was echoed by a person with knowledge of the situation at a FTSE 100 clothing retailer. "You don’t want to be making a decision in July to hedge for 18 months time, because nobody knows what’s going to happen. You could put yourself in a worse position," said the person, adding that only the brave would start hedging now. Faced with higher sourcing costs one solution could be to pass those costs on to consumers through higher prices. However, in an already weak market shoppers will have little appetite for inflation, and in the case of M&S, raising prices would run counter to Rowe's stated strategy of bringing them down to cure the firm's perceived uncompetitiveness. The average price of clothing has fallen by 15 per cent in the last 10 years, according to official UK data. The key for clothing retailers will be their ability to mitigate the cost increases they face. "There are a number of things that we can do in terms of the sourcing side of things," said Helen Weir, M&S' chief finance officer, noting the firm imports 1 billion to 1.5 billion Pounds ($1.31-$1.97 billion) worth of goods each year in Dollars. Options include changing the mix of sourcing countries and further increasing the proportion of direct sourcing from factories, cutting out middlemen. Also there might be scope to re-negotiate better terms with suppliers as Asian currencies have depreciated against the Dollar. Bankers say more radical options would require a cultural shift at retailers. They could pursue "dual pricing", where they negotiate part payment for supplies in different currencies from the Dollar, for example using the Chinese Renminbi. Retailers could also collaborate more on ordering, shipping and warehousing to seek economy of scale savings. But efficiencies might be more difficult to achieve than in previous years. "Companies have already materially improved their gross margins through better buying and efficiencies on the supply side," said Ernesto Bisagno, senior analyst at ratings agency Moody's. Ultimately the clothing sellers with the biggest margins will be best able to weather the storm. Here, Next, Britain's most successful clothing retailer of the last decade, is the stand-out stock, with an operating margin for 2015-16 of 20.8 per cent, according to Reuters data. That dwarfs M&S on 7.4 per cent, which is diluted by half of its business being in the lower-margin food sector, Debenhams on 5.8 per cent (for 2014-15), Sports Direct on 9.4 per cent and Primark on 11.9 per cent (for its most recent quarter). Led by Simon Wolfson, who was among the leading business supporters of Brexit, Next should be well prepared. With some foresight, he had warned in March that 2016 could be its toughest year since 2008. (Reuters)

British clothing retailers face Brexit double whammy

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