By  on October 24, 2008

The credit markets are showing some signs of health, but the stock market remains schizophrenic and, for retailers, mostly depressed.

The Standard & Poor’s Retail Index initially fell hard on Thursday only to claw its way back, closing down 1.5 percent, or 3.85 points, to 256.40, even as the Dow Jones Industrial Average staged a late rally to close up 172 points, or 2 percent, to 8,691.25.

Retail shares dropped as much as 6.8 percent during the trading session as investors continued to guess at the impact of the financial crisis and economic slowdown on shoppers and retailers.

Several fashion companies have lost more than 75 percent of their share value since hitting their respective 52-week highs, including The Bon-Ton Stores Inc., down 90.6 percent; Charming Shoppes Inc., 84.9 percent; Dillard’s Inc., 83.3 percent; Chico’s FAS Inc., 79.5 percent; Gottschalks Inc., 78.3 percent; New York & Company Inc., 77.9 percent; Liz Claiborne Inc., 76.4 percent; Stein Mart Inc., 76 percent, and Saks Inc., 75.4 percent.

The holiday season is forecast to be the worst in years and investors and store executives appear to be settling in for difficulties.

“A lot of this is just simply consumer sensitivity to pricing,” Bill Rhodes, chief investment strategist at Rhodes Analytics, said. “They are concerned about their incomes. They’re concerned about their work. They probably are not getting the kinds of credit card offers that they were before, in many cases they have to pay [their credit cards] down.”

Rhodes said his models call for an “underweight” position on apparel retailers, but added there was no clear evidence where the markets are headed, especially since the troubles have moved from Wall Street to the broader economy.

Among retail issues on Thursday, Dillard’s declined 22.7 percent to $3.92. The regional department store player was removed from the S&P 500 index on Tuesday, compelling some investment funds that are focused on the index to sell their holdings.

Others on the way down were: Bon-Ton, declining 15 percent to $1.70; Kohl’s Corp., 6.6 percent to $28.26; Sears Holdings Corp., 6.4 percent to $49.98; J.C. Penney Co. Inc., 4 percent to $19.50; Saks 1.9 percent to $5.68, and Stein Mart, 1.5 percent to $1.92. Gottschalks managed to rise 5.4 percent to 97 cents.

Specialty stores losing ground included Charming Shoppes, down 16.7 percent to $1.15; J. Crew Group Inc., 8 percent to $16.71; Urban Outfitters Inc., 7.8 percent to $20.12; Limited Brands Inc., 7.4 percent to $10.89; New York & Co., 7.3 percent to $2.68; Aéropostale Inc., 6.6 percent to $21.85, and Chico’s, 1.1 percent to $2.84.

On the vendor side, G-III Apparel Group Ltd. got a vote of confidence from Eric Beder, Brean Murray Carret & Co. analyst, but the stock still closed down 9 percent to $14.44.

“The company is a key supplier to major department stores with Macy’s remaining its largest buyer; J.C. Penney is also a key resource,” said Beder, who reiterated his “buy” rating on the stock. “You would expect G-III management to bemoan its fate. Instead, it is very upbeat.”

And so is Beder, who said the outerwear and sportswear producer is linked to good brands, including Guess, Calvin Klein, Sean John and Kenneth Cole, has been conservative with inventory, and is gaining traction in the dress category.

Other vendors stumbling in the markets were: Liz Claiborne, down 10.4 percent to $7.30; Jones Apparel Group Inc., 7.2 percent to $8.64; Phillips-Van Heusen Corp., 5 percent to $22.99, and Polo Ralph Lauren Corp., 3.7 percent to $42.39.

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