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.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews