Retail stocks were battered Wednesday when stock markets tumbled amid the latest round of fears about the housing slump and troubled mortgage lenders.
This story first appeared in the July 10, 2008 issue of WWD. Subscribe Today.
Among those feeling the pain were stores that disclosed their June comparable-store sales ahead of the pack. Comp-store sales for Chico’s FAS Inc. fell 12.9 percent for June, sending the company’s stock down 5.4 percent to $5.03. Despite a 6 percent rise in comps from June 2007 to June 2008, Caché Inc. shares dropped 8.3 percent to $11.63 on word that it had lowered its third-quarter guidance. Even shares of Buckle Inc., which announced a same-store sales surge of 28.9 percent, remained relatively flat, down 0.5 percent to $46.47.
Teen retailers were generally among the hardest-hit. Zumiez Inc. slumped 6.6 percent to $17.10, Abercrombie & Fitch Co. fell 5.8 percent to $57.18, American Eagle Outfitters Inc. slid 4.8 percent to $12.99, Pacific Sunwear of California Inc. dropped 4.4 percent to $8.28, and Aéropostale Inc. diminished 3.9 percent to $31.96.
Overall, the bear market gained momentum as the Standard & Poor’s Retail Index fell 3.3 percent to 34.67. The Dow Jones Industrial Average sank 236.77 points, down 2.1 percent, to 11,147.44, while the S&P 500 dropped 2.3 percent to 1,244.68.
In the department store sector, J.C. Penney Co. Inc. dove 5.7 percent to $35.67, Sears Holdings Corp. dropped 4.6 percent to $72.54, Macy’s Inc. declined 4.4 percent to $18.04, Kohl’s Corp. fell 5.1 percent to $42.18 and Nordstrom Inc. dipped 4 percent to $31.24.
Wal-Mart Stores Inc. fell 2.4 percent to $57.67, while rival Target Corp. was off 2.8 percent to $47.32.
The Talbots Inc. registered an 8.4 percent decline to $10.98. AnnTaylor Stores Corp. fell 3.6 percent to $23.22. Charming Shoppes Inc. was one of the few retailers to beat the trend, as investors seemed to approve the resignation of the plus-size apparel retailer’s chief executive officer, Dorrit Bern. The company closed at $4.84, up 3 percent.
Vendors also suffered. Coach Inc. dropped 6.9 percent to $26.80, Liz Claiborne Inc. sagged 5.5 percent to $12.67 and Lululemon Athletica Inc. tumbled 6.3 percent to $25.72. Maidenform Brands Inc., which announced the appointment of Maurice S. Reznik as chief executive officer, fell 4.1 percent to $12.37. Phillips-Van Heusen Corp. dropped 3.8 percent to $35.44 and VF Corp. was off 2.1 percent to $73.69. Warnaco Group Inc. emerged with a 1 percent decline to close at $42.79.
After the bell Wednesday, Hot Topic Inc. reported a 0.3 percent drop in June same-store sales and Zumiez said its June comps fell 3.4 percent.