The reelection of President Obama freed Wall Street to worry in earnest about the looming fiscal cliff as well as the euro zone crisis and the general global economic malaise.
The Dow Jones Industrial Average on Wednesday sank back below 13,000, falling 2.4 percent, or 312.95 points, to 12,932.73 as the S&P 500 Retailing Industry Group fared somewhat better, declining 1.5 percent, or 9.82 points, to 649.15.
Among the fashion and related companies getting hit the hardest were Tumi Holdings Inc., down 5.1 percent to $21.75; The Bon-Ton Stores Inc., 5 percent to $11.97; Elizabeth Arden Inc., 4.7 percent to $46.61; Tiffany & Co., 3.7 percent to $62.92, and Abercrombie & Fitch Co., 3.5 percent to $32.84.
Obama logged a decisive win in the electoral college, but still faces a divided legislative branch. Together the two sides will face automatic tax increases and spending cuts at the end of this year — what Federal Reserve chairman Ben S. Bernanke dubbed the “fiscal cliff.” Should the taxes kick in without modification, many see dire consequences for the U.S. economy, which is already limping along and being propped up by Fed debt purchases and ultralow interest rates.
“The political landscape has changed little after the elections,” said Nigel Gault, IHS Global Insight’s chief U.S. economist. “Some uncertainties, over health care reform and the Federal Reserve, have been cleared up by President Obama’s reelection. But crucial uncertainties over fiscal policy remain just as severe as before.”
Gault noted the Obama victory means his health care program will stay in place and that there won’t be big changes at the Fed.
“But the key uncertainties over the future of fiscal policy remain in place,” he said. “Divided government, as before, could be a recipe for complete gridlock.”
Markets were also down in Europe, where investors were closely watching the U.S. election.
Milan’s FTSE MIB fell 2.5 percent to 15,291.78, as Frankfurt’s DAX declined 2 percent to 7,232.83, Paris’ CAC 40 dropped 2 percent to 3,409.59, and London’s FTSE 100 retreated 1.6 percent to 5,791.63.
The decliners included Burberry Group, down 2.8 percent to 12.17 pounds, or $19.45 at current exchange; LVMH Moët Hennessy Louis Vuitton, 2.4 percent to 125.90 euros, or $160.73; Marks and Spencer Group plc, down 2 percent to 3.91 pounds, or $6.25, and PPR, 1.8 percent to 134.20 euros, or $171.33.
“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
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast