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US softening its position on Huawei and disappointment in Superdry

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US softening its position on Huawei

The Trump administration has announced a major relaxation of its restrictions on US companies selling to Huawei.

Pulling back from its previous stance of a COMPLETE ban, it will now only apply to products that are related to national security. Having said that, it will still be on the “entity list”, meaning that companies will still have to apply for a licence.

This announcement comes two weeks after the American and Chinese presidents agreed to a truce at the G20 meeting but, to be honest, I think a lot of the damage has already been done to Huawei.

Trump’s recent blanket ban on the company and resulting global negative PR campaign will have put the seeds of doubt not only in Huawei’s customers, in that it could easily happen again – but also in Huawei itself, which has no doubt accelerated plans to become more self sufficient in terms of key components and operating systems.

The other thing is that customers may now be more reticent about buying their products – especially their phones, considering most people hold on to them for longer these days – meaning that Huawei’s previously exponential growth is likely to waver.

Disappointment in Superdry

The second thing I wanted to talk about was Superdry.

The company warned of more gloom as Julian Dunkerton, the company’s co-founder, painted a bleak picture of current and future revenues due to tough competition, Brexit uncertainty and unresolved issues left over from the previous management.

Clearly, Dunkerton is trying to buy himself time by painting as dark a picture as possible but I have to say – how many t-shirts and hoodies can Superdry really sell?

So far, Dunkerton has at least broadened the range of items available online and in some stores, but to be honest it looks to me like the company could be in for a big downfall if it doesn’t get a proper idea refresh.

Gap was known back in the day for its t-shirts and cargo pants, French Connection was popular because you could semi-offend someone with what looked like a rude word – and look where those two brands are now.

Dunkerton has got some serious work to do to get things back on track, so I think he needs to take some very drastic action with his product offering otherwise Superdry will go down the same road.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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