By and  on October 5, 2009

Fear of a sluggish economic recovery weighed on Wall Street last week, sending retail stocks and the major indices down more than 1 percent.

Stocks recovered from morning losses on Friday, when the Labor Department reported a higher-than-expected jump in job losses and an increase in the unemployment rate to 9.8 percent in September from 9.7 percent in August, but still finished down for the day and week. The S&P Retail Index slumped 0.8 percent on Friday to 367.39, 1.3 percent below the previous Friday, but still up 31.6 percent for the year.

Of the 172 apparel, retail, beauty and related stocks tracked by WWD, only 39 were ahead for the week, while 129 retreated and four were unchanged.

In the world of finance, CIT Group Inc., which late Thursday laid out a debt exchange to improve its creaky capital structure, saw its shares improve 11 cents, or 10.4 percent, to $1.17 on Friday. While 27.3 percent below the prior week’s close, the final price was above the $1.01 low point for the week reached Thursday, when concerns about a bankruptcy filing were nearly as strong as they’d been in July.

CIT said Thursday that, in addition to offering the debt exchange, it’s preparing a prepackaged bankruptcy filing in case the restructuring plans can’t win the support of bond holders by the Oct. 29 deadline.

Warnaco Group Inc., which has been expanding despite the consumer slowdown, expects to keep growing over the next five years as the licensed Calvin Klein business stretches out. Already, Calvin Klein goods — including jeans, underwear and accessories — produce annual revenues of $1.4 billion for Warnaco.

“Our plan over the next five years is to double that business to $2.8 billion,” said Joe Gromek, president and chief executive officer, who laid out the company’s plans at an investor meeting Friday. The company’s total revenues are projected to rise to more than $3.3 billion in 2014 from less than $2 billion this year.

Todd Slater, analyst at Lazard Capital Markets, said very few of the company’s competitors could project such increases in revenues, earnings before interest and taxes and net income. He said the company’s EBIT rate could rise to the midteens from roughly 11 percent given its focus on the high-margin Calvin Klein business, the international business and cost disciplines.

“The company continues to grow faster than and significantly outperform its peers as a result of the ck Jeans brand, international market share gains and retail expansion,” Slater said in a research note. He has a “buy” rating on the stock and a target price of $48.

Shares of Warnaco slipped $1.44, or 3.3 percent, Friday to close at $41.73.

The S&P Retail Index concluded the third quarter of the calendar year with a 17 percent increase, better than the 15 percent appreciation of the Dow Jones Industrial Average and S&P 500.

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