Retail stocks extended gains from Monday’s rally and rose 1.5 percent Tuesday.
The S&P Retail Index advanced 5.19 points to 343.67, marking a two-day surge of 7.8 percent. Retail stocks shot up Monday as hints of optimism in May economic reports — including a slower decline for U.S. manufacturing and more job postings online — outshined the historic bankruptcy of General Motors Corp.
Shares of Sears Holdings Corp. climbed 8.9 percent to $67.35 Tuesday after GE Capital extended the company $400 million as part of a $4 billion asset-based credit facility. Also gaining ground were The Talbots Inc., up 19.7 percent to $4.19; Coldwater Creek Inc., 9.3 percent to $4.69; Macy’s Inc., 3.2 percent to $13.87, and J.C. Penney Co. Inc., 3 percent to $30.87.
The past few months have been a time of redemption for retail stocks. The sector is up 17 percent since the end of the first quarter on March 31.
Liquidity continues to be a major, if not all-encompassing, concern, however.
Debt watchdog Fitch Ratings said retailers’ credit ratings still faced more risk of downgrades than chance of upgrades. “Negative rating movement is more likely for retailers selling discretionary products, such as department stores and specialty retailers, due to the expectation that sales and financial metrics will remain under pressure,” Fitch said in an analysis this week.
Credit facilities are an important source of liquidity for retailers, but banks are exacting a higher toll for their exposure. Sears, Macy’s and J.C. Penney have all renewed or amended their credit arrangements in recent months, and the rest of retailing will have to go through the process sooner or later.
“While the ability to get new facilities is encouraging, of concern is the increased burden new terms will have for companies,” Fitch said. “Generally, the size and the tenor of these facilities have been reduced, and terms — including pricing, covenants and security — have become more onerous. These trends are expected to continue.”
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