Sports Direct faces tough times ahead

On Wednesday, markets worldwide witnessed a great deal of activity within the apparel and fashion niches, with the likes of Sports Direct, New Look, and Chico's FAS centering all the attention.

In the UK, both Sports Direct and administrators for collapsed fashion retailer USC are facing an investigation by the government’s Insolvency Service as former employees take legal action over a controversial restructuring of the chain.

As amply covered by British media, the investigation comes after Mike Ashley, Sports Direct’s founder and majority shareholder, was called before a Scottish parliament committee to give evidence on the demise of USC, which called in the administrators last month.

Still in the UK, New Look reported profits rose by more than a quarter as record online Christmas trading helped it overcome challenging conditions. Thus, the company was able to offset the impact of the warm autumn, which left underlying sales 1 percent lower for the three months to December, 27.

As reported by the high street champion, like-for-like sales in the UK grew by 4.1 percent in the seven weeks to January, 3, buoyed by strong demand on Black Friday, Cyber Monday and Boxing Day.

Chief executive Anders Kristiansen shared his satisfaction about the performance of the company saying: "This is a robust performance against a challenging backdrop."

Across the Atlantic, Chico's FAS, Inc. would be worth between 18.15 and 20.25 dollars a share in a takeover, an analyst said Wednesday. Soon after this valuation, the company's shares closed higher, up by 6 percent. The day before, various media reported on apparent take-out talks with private equity firm Sycamore Partners. The latter would still be trying to secure financing.

Elsewhere, the Dubai index fell on Wednesday, extending losses for another session from their highest level in nearly a month, weighed by weak crude oil, reported local media. “Weak crude oil prices pulled the market down. The markets, which were down today like Saudi Arabia and Dubai, were most sensitive to crude,” said Sanyalaksna Manibhandu, Manager of Research, National Bank of Abu Dhabi Securities.

Badly affected by falling oil prices was fashion retailer Marka, which ended 2.96 percent lower at Dh1.31.