The major indices tried, but ultimately failed, to make back some of the ground surrendered on Monday, but retail shares spent virtually the entire day in negative territory and finished down more than 2 percent.
The S&P Retail Index ended Tuesday trading at 235.29, down 5.76 or 2.4 percent, enduring a far greater slump than the broader, more closely watched indices. The Dow Jones Industrial Average was off 0.6 percent to 6,726.02, and the S&P 500 shed 0.6 percent to 696.33. Like the Dow’s historic sub-7,000 finish on Monday, the S&P 500’s fall below the 700 mark turned back the clock in a most unfortunate way for investors, putting it at a level not seen since October 1996.
The markets were again faced with the formidable task of mounting a comeback — after four consecutive losing sessions — without the benefit of a catalyst. While Federal Reserve chairman Ben Bernanke and Treasury Secretary Tim Geithner both faced Congressional scrutiny on Tuesday, troubling economic news came virtually without interruption, from word of still-deteriorating sales of existing homes and U.S. automobiles to reports that Blockbuster had hired bankruptcy counsel.
Underlying the market’s softness, however, is ongoing fear that, hundreds of billions of dollars into the government’s bailout of financial institutions, there are still no viable signs of stabilization. In fact, speaking of the latest bailout of American International Group, its fourth rescue parcel, Bernanke told members of the Senate Budget Committee Tuesday, “It’s a terrible situation, but we’re not doing this to bail out AIG or their shareholders. We’re doing this to protect our financial system and to avoid a much more severe crisis in our global economy.”
Bankrupt Gottschalks Inc. said it was continuing talks regarding “going concern offers” and had extended its auction date to March 30.
In the world of apparel retailing, Chico’s FAS Inc. and Cache Inc. both reported fourth-quarter losses, although both firms delivered better EPS results than had been expected. (See related story and more stock information, page 14.) Included in the weakest performers among the stocks tracked by WWD Tuesday was another misses’ specialist, Charming Shoppes Inc., whose shares fell 20 percent to close the day at 52 cents.
Among broadline retailers, declines were the rule. Saks Inc. declined 6.3 percent to $2.25, Target Corp. 5.2 percent to $25.95, J.C. Penney Co. Inc. 3.9 percent to $14.18, Macy’s Inc. 2.6 percent to $7.18 and Wal-Mart Stores Inc. 1.4 percent to $47.38.
Liz Claiborne Inc., which reports fourth-quarter results today, saw its shares advance 5.6 percent to $2.82, and Jones Apparel Group Inc. was up 4.1 percent to $2.81. However, decliners included Oxford Industries Inc., off 12.9 percent to $3.70; VF Corp., 3.2 percent to $47.88, and Phillips-Van Heusen Corp., 2.6 percent to $15.54.
But retail stocks have so far avoided the historic lows suffered by firms on the Dow and S&P 500, although the recalibration of the S&P Retail Index in June 2002 make such long-range comparisons impossible.
Still, the index hit its all-time low of 207.49 during intra-day trading on Nov. 21, and, although that trough could easily be tested in the days ahead, this year hasn’t dipped below the 240.36 low it hit on Feb. 23. Additionally, retail shares tend to be a leading, rather than lagging, indicator of market activity, so exposure to additional downturns may be limited.
In fact, the S&P Retail Index hit its all-time high of 538.50 more than two years ago, on Feb. 20, 2007.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia