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.
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)