Stable can be good.Despite the shift in consumer shopping behavior patterns and the ongoing impact on retail and apparel firms, credit ratings agency Moody’s Investors Service has a “stable” outlook for the two sectors for 2018.Five out of 14 retail subsectors will see operating income growth above 5 percent next year, led primarily by the e-tailers with a 36 percent growth rate, dollar stores up 7.9 percent and home improvement up 6.6 percent. Dragging the broader sector performance will continue to be discounters and warehouses, department stores — the only subsector to see a decline in the growth rate at down 2.7 percent — and apparel and footwear, as well as drug stores.Moody’s predicted that growth investments by Wal-Mart Inc., CVS Health Corp. and The Walgreen Co. should begin to pay off, and firms such as Macy’s Inc., Kohl’s Department Stores and Nordstrom Inc. should begin to see their losses taper off. The ratings agency is predicting sales growth between 3.5 to 4.5 percent, while solid gains in household wealth becomes a “clear positive” for the broader sector.Credit-wise, distressed debt in retail comprises 5 percent of total rated retail debt concentrated in Neiman Marcus, Sears Holdings Corp. and Claire’s. Also, retailers have been rightsizing their real estate, with Moody’s predicting that the number of mall stores will decline by more than 2.5 percent in 2018, and off mall growth decelerating.One factor could shift the outlook to negative is a “material industry-wide supply chain disruption. Another is any sign that revenues will flatten or decline. Moody’s also said the outlook could change to positive should operating income accelerate above 5 percent. Another plus would be growth driven by higher consumer spend not attributable primarily to cost cuts.In apparel, profit growth will be more widespread among firms that can benefit from product innovation, cost savings and synergy initiatives. Weak traffic trends and high promotional activity will remain as the top challenges for the sector.Moody’s expects 2018 operating earnings to grow 4 to 6 percent for apparel firms, noting that foreign exchange rate pressures should also abate next year. What could shift the outlook to negative include a tax or trade policy that hurts sales or profits, while top line growth gains, price increases that take hold and steady inventory levels could change the outlook to positive.On the credit side, lingering challenges in the U.S. included weak traffic trends and high promotional activity.Among the firms in the vendor group, Moody’s said key initiatives at Nike Inc. is expected to drive continued global growth, while the Way Forward Plan at Ralph Lauren Corp. is showing good results so far. Further VF Corp.’s active reshaping of the brand portfolio has Moody’s predicting a “rapid debt reduction following recent acquisitions.” The ratings agency also said cost-savings initiatives should begin to yield improvement in 2018 for Under Armour Inc.
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)