Retail shares continued their slide Tuesday, falling 3.1 percent as a mixed bag of economic reports foreshadowed at the least a staggered and difficult slog back from the depths of the recession.
The S&P Retail Index retreated 10.15 points to 317.39, marking a 4.4 percent decline for the week so far and the fourth down session in five. The Dow Jones Industrial Average fell a milder 1.3 percent, or 107.46 points, to 8,504.67 Tuesday and is down 3.3 percent over the last two trading sessions.
U.S. industrial production fell 1.1 percent in May as capacity utilization dipped to 68.3 percent — well below the 80.9 percent average since 1972, according to government figures. The utilization figure, and the idle factories and lost jobs it represents, is illustrative of the challenge facing consumers, who are suffering from an unemployment rate of 9.4 percent. On a more encouraging note, the government said May housing starts rose 17.2 percent from April.
For retailers, the end result of various economic forces pushing and pulling consumers is lower revenues.
Same-store sales slid 0.6 percent last week from the preceding week, according to the International Council of Shopping Centers and Goldman Sachs & Co. Excluding Wal-Mart Stores Inc., the ICSC expects June sales to fall 5 percent from a year earlier.
“Sales is still the big picture,” said Tiffany Co, a debt analyst at Fitch Ratings. “Sales declines haven’t stabilized.”
And just as the stock market has rebounded in recent months, the debt markets also have improved despite continued weakness in business fundamentals.
“There is an appetite for high-yield issues right now,” Co said, noting Limited Brands Inc.’s recent move to issue $500 million in bonds to repay other debt. “There’s a lot of cash that needs to be invested, so there’s investor appetite for these issues now, whereas a couple of months ago, the high-yield market was pretty much shot.” High-yield debt is generally speculative in nature.
In the equity markets Tuesday, The Bon-Ton Stores Inc. weathered the most dramatic retail decline, falling 12.5 percent to $3.91. Other decliners included AnnTaylor Stores Corp., off 8 percent to $6.64; J. Crew Group, 7.7 percent to $23.04; Saks Inc., 7.2 percent to $4.02; Nordstrom Inc., 6.8 percent to $18.99; J.C. Penney Co. Inc., 6.3 percent to $26.38, and Limited Brands Inc., 5.4 percent to $11.83. In Hong Kong, the Hang Seng Index was off 1.8 percent, while European markets were mixed, with the CAC 40 down 0.2 percent in Paris and the FTSE 100 ahead 0.1 percent in London.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)