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Men’s Retailers Rally on Men’s Wearhouse-Jos. A. Bank Deal

S&P 500 Retailing Industry Group slips 0.7 percent.

The Men’s Wearhouse Inc.’s agreement to buy Jos. A. Bank Clothiers lifted their shares and those of big & tall men’s specialist Destination XL Group Inc. as U.S. retail stocks overall fell for a second straight day.

The S&P 500 Retailing Industry Group pulled back 0.7 percent to 932.87, a steeper drop than either the Dow Jones Industrial Average or S&P 500, which declined 0.4 and 0.5 percent, respectively, to 16,351.25 and 1,867.63.

After the midday disclosure that Jos. A. Bank had agreed to be taken over by its larger competitor for $1.8 billion, or $65 a share, both stocks gained ground and recorded among the strongest results of U.S. equities in the retail sector. Men’s Wearhouse shares rose 5 percent to $57.32 while Jos. A. Bank’s moved up 3.9 percent to $64.22. And Destination XL Group matched Jos. A. Bank’s percentage increase, moving to $6.19.

Conversely, shares of The Bon-Ton Stores Inc. receded 9.8 percent following a drop in fourth-quarter net income and news that Brendan Hoffman, chief executive officer, would leave the firm at the end of the current fiscal year for what he described as “strictly personal reasons.”

American Eagle Outfitters Inc. logged the second biggest descent among the U.S.-based issues tracked by WWD, falling 7.8 percent to $13.10 after reporting a steep drop in its fourth-quarter profits and a 6.7 percent decline in quarterly revenues.

Other youth-focused retailers — including American Apparel Inc., Urban Outfitters Inc., Pacific Sunwear of California Inc. and Abercrombie & Fitch Co. — weathered declines of between 2.8 and 6.8 percent.

In Europe, results were mixed.

The DAX in Frankfurt closed up 0.5 percent to 9,307.79, while the FTSE MIB in Milan gained 0.4 percent to 20,833.92. But the FTSE 100 in London headed down 0.1 percent to 6,685.52, while the CAC 40 in Paris lost 0.5 percent to 4,349.72.
 
While it was also a uneven day for fashion, luxury and retail stocks, a few British apparel retailers notched up rises, with both Next and Sports Direct among the FTSE 100’s best performers.

The activewear retailer Sports Direct climbed 3.6 percent to 8.38 pounds, after the firm said it plans to award its founder and executive deputy chairman Mike Ashley shares worth around 65.8 million pounds, conditional upon the retailer achieving an EBITDA figure of 330 million pounds in 2014 and 410 million pounds in 2015. Next, meanwhile, gained 2.3 percent to 67.45 pounds after Bank of America said in a research note that it had increased its target price on Next’s shares.

Other gainers in the sector included Brunello Cucinelli, up 6.1 percent to 20.51 euros, after the firm said Monday that its profits rose 10.9 percent during 2013. Hermès gained 2 percent to 235.85 euros while the Indian retailer Koovs, which debuted on London’s AIM market Monday, surged 19.6 percent to 2.20 pounds.

Those that fell included Mulberry, down 2.3 percent to 6.60 pounds; Geox, which dipped 4.2 percent to 3.34 euros, and Kering, down 1.3 percent to 142.75 euros.

The pound traded for $1.67 against the U.S. dollar, while the euro changed hands for $1.39.