Marks & Spencer Share News (MKS)

(ShareCast News) - Exane painted a doom-laden picture for traditional European clothing retailers in the next few years, as Amazon stands on the cusp of becoming a top-10 clothing retailer in the US with Europe next in its sights.With a nod to George Lucas' interstellar series, Exane entitled its note "Clothing Wars - Amazon: The force awakens" and said the consumer journey is set for another revolution as clothes shopping gravitates further online, with search and social media platforms also looking to muscle in along with the e-commerce giants.Examining the impact on the "disruptors that risk being disrupted" as Amazon's thrust into clothing sales accelerates the structural trend towards on-line, Exane argued that "being an aggregator is no longer enough", success demands something different like a niche or identity.That is seen in Asos and Yoox Net-A-Porter (YNAP) but less so at Zalando, but implications not limited to the online clothing retailers, with "reasons for longer-term caution for both Marks & Spencer and Next".Built as a fashion destination, Asos offers consumers content, advice and inspiration that the likes of Amazon can't match, Exane said, affixing an 'outperform' rating on the London-listed e-retailer."It offers product that others can't match, most notably its crucial own-brand. It is a far broader destination than just a transactional platform. ASOS benefitted when Zalando threw marketing spend into Germany and drove consumer awareness. We expect the same to happen with Amazon."Germany's Zalando, on the other hand, is a transactional platform, targeting the mass-market consumer with a model inspired by US etailer Zappos."With a new competitive threat on the horizon, we fear market share progress could prove tougher and more expensive than experienced to date, weighing on the margin profile of the group."The shares were given an 'underperform' rating.Like Asos, Milan-listed YNAP also looks "relatively well shielded" from disruption, the broker added, but only given a 'neutral' recommendation."After many attempts Amazon does not seem to be pursuing its growth in off-season as aggressively, and the Net-A-Porter offer shares many of the same characteristics as ASOS. Nonetheless, premium valuation and near-term execution risk leave risk/reward looking balanced."However, the implications were not limited to the online clothing retailers, an acceleration of online clothing spend was set to heighten the structural pressures on multi-channel retailers, particularly those with inflexible cost-bases and an absence of self-help drivers.M&S was favoured in the short-term due to its self-help measures and cash returns, over the structural risks, greater online exposure and lower potential for self-help at Next.