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American Apparel Shares Up as Retail Declines

Retail sector breaks three-day winning streak as major indices log small gains.

Shares of American Apparel Inc. outperformed among fashion stocks today, rising 6.7 percent after the ouster of founder and chief executive officer Dov Charney.

After three consecutive days of advances, the S&P 500 Retailing Industry Group closed out the day’s trading session with a drop of 0.7 percent to 887.96. The index failed to follow the leads of the Dow Jones Industrial Average and S&P 500, which were both up 0.1 percent, to 16,921.46 and 1,959.48, respectively.

American Apparel shares were up 4 cents to 68 cents and traded at as high as 78 cents during the day. The company faces a myriad of financial challenges, including a potential default triggered by Charney’s dismissal. In the past year, shares have traded as high as $2.09, on July 29, and as low as 46 cents, on April 8.

Among fashion, retail and beauty equities tracked by WWD, the largest decline belonged to Coach Inc., off 8.9 percent to $35.69 after it outlined plans for store closures and a fine-tuning of its outlet model. Other declines were modest in comparison, led by Zumiez Inc.’s 2.7 percent drop to $27.03 and American Eagle Outfitters Inc.’s 2.4 percent pullback to $11.50.

On the plus side of the ledger, Lands’ End Inc. and its former parent, Sears Holdings Corp., registered the largest gains of the day following American Apparel’s, with Lands’ End up 5.9 percent to $34.87 and Sears ahead 3.6 percent to $40.98.

European markets ended the day much as they started it – on the uptick.

The FTSE MIB in Milan led the way, closing up 0.9 percent to 22,216.63, followed by the CAC 40 in Paris and the DAX in Frankfurt, both of which were up 0.7 percent to 4,563.04 and to 10,004.00, respectively. The FTSE 100 in London advanced 0.4 percent to 6,808.11.

Retail and luxury stocks were mostly up, with the day’s biggest risers including Mulberry Group, 2.2 percent to 7.45 pounds; Safilo Group, 2.5 percent to 15.94 euros; Geox, 2.2 percent to 2.72 euros, and Gemfields, 5.1 percent to 52 pence.

Among the stocks that lost the most ground were Aeffe, down 3.7 percent to 1.32 euros; French Connection Group, 1.5 percent to 64 pence, and Yoox Group, 1.3 percent to 19.48 euros.

The euro traded at $1.36 against the U.S. dollar, while the pound fetched $1.70 and the Swiss franc equaled $1.11.