NEW YORK — The WWD Composite Stock Index retreated for the fifth consecutive week, ticking down 0.4 percent to 1,062.67 from 1,066.69 last week amid a general market malaise and sustained competition from stocks in other sectors of the economy.
The S&P 500 also fell for the fifth week in a row, dipping 1 percent to 1,101.39 from 1,112.81 a week ago.
Hot Topic Inc. was the biggest loser as its shares plunged 19.2 percent to $15.56 from $19.26 last week. The sell-off followed Hot Topic’s report that same-store sales for July will drop 6 to 8 percent. Additionally, the trendy teen retailer lowered its sales and earnings forecast for the rest of the year, blaming problems incorporating preppy styles into its women’s and men’s fashions. Hot Topic’s stock now has lost more than 45 percent of its value since Jan. 2.
Also losing ground was May Department Stores Co., which saw its shares fall 2.9 percent to $25.25 from $26 a week ago. Investors likely took into account a downgrade of the company’s long-term corporate credit rating from Moody’s Investors Service and Standard & Poor’s Ratings Services. The ratings agencies cited the impairment to May’s credit quality that will result from its planned debt-financed acquisition of Marshall Field’s.
Perry Ellis International is in talks to hire designer Patrick Robinson from its better sportswear licensee, Public Clothing Co., and to launch its own women’s collection business, but investors were unimpressed. Perry Ellis’ stock dropped 7.9 percent to $23.01 from $24.98 last week. Perhaps investors remembered that the first time Perry Ellis tried to make its own high-end women’s sportswear collection in 1993, the line was discontinued after dismal retail reaction to the infamous “grunge” collections of Marc Jacobs.
In a rare bright spot, Charlotte Russe Holding Inc.’s stock advanced 1.6 percent to $20.44 from $20.11 a week ago, bolstered by third-quarter earnings that soared 98.8 percent to $5.5 million on a sales gain of 24.1 percent to $133 million. Same-store sales improved 7.1 percent.
— Dan Burrows
This story first appeared in the July 19, 2004 issue of WWD. Subscribe Today.