Shares of American Eagle Outfitters Inc. plunged on Friday, reaching the lowest level in six years after the teen retailer was downgraded on news that Susan P. McGalla, president and chief merchandising officer, will not renew her contract with the company.
Coming off Thursday's stock meltdown, most retail shares continued to slide and the Dow Jones Industrial Average almost reached bear market territory, down just under 20 percent from its October 2007 high. The S&P Retail Index fell 0.5 percent to 359.56. The Dow dropped 0.9 percent to 11,346.51 and the broader S&P 500 declined 0.4 percent to 1,278.38.
American Eagle Outfitters was among the New York Stock Exchange's biggest decliners, plunging 14.4 percent to $13.53. The previous 52-week low was $15.45. The retailer was downgraded by Oppenheimer to "perform" from "outperform." In a research note, Roxanne Meyer, retail analyst at the firm, cited McGalla's departure, fashion misses and the weak economy as the catalysts for the downgrade.
McGalla's contract expires on Jan. 31, 2009. The company will conduct a search for a new chief merchandising officer.
Macy's Inc. and Christopher & Banks Corp. reached 52-week lows in intraday trading. Macy's fell to $18.94 before recovering to gain 0.3 percent to $19.53. Christopher & Banks reached $6.74 and closed at $7, down 20.6 percent. The previous 52-week low was $7.65. The company on Thursday reported a weak second-quarter earnings outlook.
J. Crew Group dropped 2 percent to $32.67, American Apparel Inc. fell 6.6 percent to $6.35 and Guess Inc. dropped 2.8 percent to $37.75.
Women's retailers were down, as Chico's FAS Inc. fell 1.2 percent to $5.69, The Talbots Inc. sank 4 percent to $12.09 and Coldwater Creek Inc. declined 6.1 percent to $5.43.
Among high-end retailers, Saks Inc. declined 0.5 percent to $11.45, and Nordstrom Inc. decreased 1.8 percent to $31.07.
On the upside, J.C. Penney Co. Inc. increased 2.4 percent to $36.83, Kohl's Corp. grew 2.1 percent to $41.38 and Sears Holdings Corp. gained 4.5 percent to $77.73.
In the men's sector, Casual Male Retail Group plunged 9.1 percent to $3.49, reaching its lowest point since March 2003.
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