The continuing decline of crude oil acted like an economic stimulus package on Monday, pushing retail stocks to their highest levels since June. The Standard & Poor’s Retail Index rose 18.14 points, or 4.8 percent, to close at 400.06, its first trip across the 400 threshold since June 17. The index hadn’t ended a session above the 400 mark since June 5.
This story first appeared in the August 12, 2008 issue of WWD. Subscribe Today.
The Nasdaq Composite closed up 1.1 percent to 2,439.95, but the Dow Jones Industrial Average was up 0.4 percent to 11,782.35 and the S&P 500 rose 0.7 percent to 1,305.31. Oil began the day higher on fears over the effect of the conflict between Russia and Georgia, but then resumed its slide, with a barrel of crude falling briefly to $113, after the dollar continued to strengthen and China reported a drop in oil imports. With prices continuing to come down at gas pumps in the U.S., the effect on retail stocks was dramatic and sustained.
Two retailers, Tween Brands and men’s wear specialist Jos. A. Bank Clothiers, Inc., enjoyed double-digit gains of 12.3 percent each in their shares, as did boardsport apparel supplier Volcom Inc. Zumiez registered a 9.2 percent increase in its share price for the day, landing at $14.39, and Kohl’s Corp. checked in with an 8.8 percent pickup, to $51. Among vendors reaping the benefits were Cherokee Inc., up 9.7 percent to $23.46; G-III Apparel Group Ltd., up 9.5 percent to $17.01; Hartmarx Corp., up 9.3 percent to $1.88; Parlux Fragrances Inc., up 8.9 percent to $5.87, and True Religion Brand Jeans, up 7 percent to $30.89. European shares enjoyed a strong session earlier in the day, with Burberry Group plc leading fashion shares with an 8.6 percent increase to 496.25 pence, or $9.54 at current exchange. In Milan, IT Holding SpA advanced 6.4 percent to 0.51 euros, or 77 cents.
Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros.