Retail stocks dropped 3 percent Thursday as questions about the current quarter overwhelmed strong first-quarter showings from Kohl’s Corp. and Urban Outfitters Inc.
The S&P Retail Index fell 14.15 points to 460.24 as the Dow Jones Industrial Average slipped 1.1 percent, or 113.96 points, to 10,782.95.
Kohl’s posted a 45.3 percent rise in first-quarter profits, but its outlook for the current quarter came in short of expectations and the stock fell 5.8 percent to $53.81. Urban Outfitters’ profits shot up 72 percent, but the stock still fell 6.7 percent to $36.78 as analysts noted the company gave little guidance on current business trends.
Among other decliners were AnnTaylor Stores Corp., down 6.4 percent to $23.27; Dillard’s Inc., 5.4 percent to $25.72; J.C. Penney Co. Inc., 4.9 percent to $28.17, and Macy’s Inc., 4.9 percent to $23.48. Dillard’s and Penney’s are scheduled to report their first-quarter results today.
Retail stocks have been particularly volatile since last week’s still-unexplained crash in equity markets and then Monday’s rally following Europe’s nearly $1 trillion bailout for Greece and other cash-strapped countries.
Shares in the sector have fallen in seven of the last 10 trading sessions and are down 7.9 percent from their April 26 high this year.
Retail profits are benefiting from two years of cost cuts and inventory discipline that have made for leaner operations. Spending is also starting to pick up. Earlier this month, the Commerce Department said personal consumption expenditures jumped 3.6 percent in the first quarter, leading to growth of 3.2 percent in the U.S. economy.
Around the world Thursday, the Nikkei 225 shot up 2.2 percent to 10,620.55 in Tokyo as the Hang Seng Index rose 1 percent to 20,422.46 in Hong Kong, the FTSE 100 increased 0.9 percent to 5,433.73 in London and the CAC 40 slipped 0.1 percent to 3,731.54 in Paris.
• NexCen Sells Franchises: NexCen Brands Inc. said Thursday it has inked a deal to sell its franchise businesses, including The Athlete’s Foot and Shoebox New York, to Levine Leichtman Capital Partners for $112.5 million. The company also said that following closure of the Levine Leichtman acquisition, expected in the third quarter, NexCen’s board is expected to approve a plan to dissolve the firm. The franchise sale and decision to dissolve the firm require shareholder approval. NexCen sold the Bill Blass designer brand in December 2008 to Peacock International Holdings LLC for $10 million in an all-cash transaction.
• Express Completes IPO: Specialty chain Express raised $272 million Wednesday after going public, selling 16 million shares at $17 a share. The shares, traded under the ticker symbol EXPR, priced lower than the expected $18 to $20 range. Golden Gate Capital paid $602 million to acquire a 75 percent stake in the chain from Limited Brands Inc. in 2007. Limited remains a shareholder. The company targets men and women between the ages of 20 and 30 and operated 573 stores with average square footage of 8,700 as of Jan. 30. Since Golden Gate took its stake, Express has converted stores to a dual-gender format, redesigned its go-to-market strategy and launched an e-commerce platform.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews