Stock markets swooned Tuesday as investors worried about Greece’s down-to-the-wire debt negotiations, pushing Wall Street to its worst trading day so far this year.
U.S. retail stocks fared relatively well, though, as the sector is seen as insulated from the mounting troubles in Europe. The S&P Retail Index slipped 1 percent, or 5.83 points, to 580.50. Even as the sector backed away from its all-time high of 587.84, set Monday, it is still up 11 percent so far this year, aided by solid February sales and quicker job growth.
The Dow Jones Industrial Average fell 1.6 percent, or 203.66 points, to 12,759.15, the worst performance for blue-chip stocks since Dec. 8. The market is still ahead 4.4 percent so far this year.
The day’s fashion decliners included Fossil Inc., down 4.6 percent to $119.93; Lululemon Athletica Inc., 4 percent to $66.05; Coach Inc., 4 percent to $73.12; Michael Kors Holdings Ltd., 3.7 percent to $46.81 and Ralph Lauren Corp., 3.6 percent to $170.51.
Shares of Kenneth Cole Productions Inc. slipped 0.1 percent to $15.79. The company said Tuesday that a special committee of the firm’s board of directors hired Bank of America Merrill Lynch to help it evaluate Kenneth Cole’s offer to buy out other shareholders for $15 a share. The committee, in a letter filed with the Securities and Exchange Commission on Tuesday in connection with the hiring of Bank of America, said it “has also been authorized to solicit expressions of interest or other proposals for alternative transactions...and to review any such alternative transaction that may be proposed by third parties.” The letter, dated Feb. 27, asked the designer to “reconsider his position that he is unwilling to consider any alternative proposals.” In Tuesday’s announcement, the company said Cole declined to change his stance.
Despite Tuesday’s stock market retreat, as well as concerns from some quarters that retail stocks are due for a pullback, the business outlook for the sector appears to be brightening.
“The number-one thing for consumers is income, and a big driver of income is jobs,” said James Smith, chief economist at Parsec Financial Management, which has about $1.2 billion under management. “We have pretty healthy job growth at last, and it’s likely to get a whole lot better. That’s the number-one driver of confidence. Consumers are in the mood to shop for practically everything.”
Smith said that the extension of the payroll tax cut would more than offset the rise in gas prices and that the U.S. economy was not overly exposed to Europe’s troubles. “The Euro zone is a disaster,” he said. “It’s in a recession. It could get worse. It might be a depression.”
Greece is scrambling to convince bondholders, mainly European banks, to agree to a debt swap that would give investors less favorable terms. The deadline is Thursday, and Greece needs to negotiate these new debt deals with bondholders in order to unlock a further round of bailout funds from the International Monetary Fund and the European Union.
Paris’ CAC 40 slipped 3.6 percent to 3,362.56 while Milan’s FTSE MIB and Frankfurt’s DAX both tumbled 3.4 percent to close at 16,218.06 and at 6,633.11, respectively, and London’s FTSE 100 fell 1.9 percent to 5,765.80.
The region’s biggest decliners included Ferragamo, down 5.1 percent to 14.02 euros; Yoox.com, 4.4 percent to 10 euros; Tod’s, 3.2 percent to 75.10 euros, and Geox, 3.8 percent to 2.43 euros. The euro traded at $1.32.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty