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Aeffe posts biggest gains for a fashion stock on European markets

by Giulia Crivelli

In 2014, Italian fashion and luxury group Aeffe was the biggest advancer among fashion and luxury stocks listed on European stock markets. Aeffe, which has traded on the Italian Stock Exchange in Milan since 2007, rallied from €0.70 to € 2.19 per share, posting a 212.9% jump from the beginning of 2014 (moreover, in early 2014 the stock was not at its historical low of €0.2865, which was reached on May 6, 2010).

The stock was boosted in Milan trading by the relaunch of the Moschino brand, entrusted to creative director Jeremy Scott, but especially by the company's earnings recovery last year, with results swinging to profit for the first time in four years.

This is shown by a survey conducted by Pambianco, a consulting firm that provides services to fashion firms, and that analyzed data on European and American companies.

At second place was UK high fashion house Jimmy Choo, whose shares surged 25% since their trading debut on the London Stock Exchange last October, climbing from 140 to 175 pence per share.

The UK firm is followed by Luxottica, whose shares soared over 18.3% in 2014, marking a new record high in Milan dealings and putting an end to last autumn's storm when the departure of CEO Andrea Guerra caused its share price to fall.

In terms of enterprise value to EBITDA ratio, the most-valued company in Europe is the UK's Mulberry, worth 31 times its EBITDA. The company is followed by Brunello Cucinelli (22 times), Inditex, Hermès and Puma, all worth 23 times their EBIDTA.

The least valued companies in the sample (comprising a total of 23 firms) are Swatch (7) and Safilo (8). The evaluation depends mainly on two factors: prospective growth and profitability, with a Europe-wide average of 15 times the EBITDA.

As for Asia, listed companies didn't perform as well as in the past (Prada, in particular dipped 36.1%), mainly due to the slowdown in fashion and luxury consumption in Greater China.