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.
“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