U.S. investors appeared to look past concerns of a global swine flu pandemic and focused instead on the continuing saga in the auto sector and the recession Monday as retail shares fell 1.7 percent.
Forty cases of the swine flu were confirmed in the U.S., including 28 in New York, according to the Centers for Disease Control and Prevention.
So far more than 100 people have died in Mexico from the disease, the symptoms of which mimic seasonal influenza and include fever and coughing. The outbreak prompted the European Union’s health commissioner to warn against traveling to either the U.S. or Mexico, according to published reports, and it did weigh on markets in Mexico, which also suffered an earthquake Monday, and those in Hong Kong, but didn’t affect U.S. equities to any great degree.
Although it seems to be business as usual so far, infectious diseases can wreak havoc on fashion. The 2003 outbreak of SARS, or severe acute respiratory syndrome, clamped down on travel to Asia, twisted up business plans for months and complicated sourcing.
For now, Wall Street seems more focused on the health of the economy. The S&P Retail Index fell 5.57 points to 332.66 Monday as the Dow Jones Industrial Average slid 0.6 percent, or 51.29 points, to 8,025. The Dow benefited from a more than 20 percent rise at General Motors after the carmaker said its Pontiac brand would be phased out and more workers would be laid off in its bid to survive.
Among the retailers losing ground were J.C. Penney Co. Inc., down 2.4 percent to $27.48; Target Corp., 1.7 percent to $39.39, and Kohl’s Corp., 1.3 percent to $44.86.
However, Citigroup analyst Deborah Weinswig singled out these three companies as potential beneficiaries of the deflationary pressures bearing down on apparel producers.
“The current global economic crisis has spurred a significant decline in orders, which has created excess factory capacity,” said Weinswig in a research note Friday. “As a result, factories and suppliers have become quite willing to reduce their pricing in order to try to keep their factories open.”
Companies carrying a higher proportion of private label goods should be able to benefit more, she said, noting Penney’s had a private label concentration of 45 percent last year, while private label accounted for 38 percent of Target’s nonfood business and 28 percent overall at Kohl’s.
“Because retailers have only recently begun to receive more favorable pricing during their negotiations with suppliers, we believe product cost deflation benefits have not been fully embedded into the retailers’ annual guidance,” Weinswig said.
The analyst predicted product costs on apparel, footwear and home goods would fall 5 to 7 percent in the second half of the current year.
“Retailers are likely to keep some of the cost savings to enhance their margins, and invest the remainder back into delivering greater value…through quality improvements,” Weinswig said.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast