Retail stocks got caught in the market’s downdraft Thursday, falling 0.8 percent but escaping the broader damage inflicted on the major U.S. indices.
Financial shares withered under reforms proposed by President Obama which would prevent banks from operating hedge funds and likely halt consolidation in the financial system.
“This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of quick profits and massive bonuses,” Obama said at the White House. “We have to enact common-sense reforms that will protect American taxpayers — and the American economy — from future crises as well. For while the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse.…Never again will the American taxpayer be held hostage by a bank that is ‘too big to fail.’”
The S&P Retail Index dipped 3.07 points to 403.17 as financial stocks led the Dow Jones Industrial Average down 2 percent, or 213.27 points, to 10,389.88, its biggest decline since Oct. 30 and its lowest close of 2010. The retail index hasn’t ended a session as close to the 400 mark since its 401.19 finish on Dec. 9.
Retail decliners included Zale Corp., off 11.9 percent to $2.51; Saks Inc., 5.5 percent to $6.69; AnnTaylor Stores Corp., 5.3 percent to $12.03; Macy’s Inc., 4.3 percent to $15.74; Sears Holdings Corp., 3.5 percent to $99.01; Coach Inc., 3.5 percent to $34.10; Abercrombie & Fitch Co., 3.2 percent to $30.68, and Target Corp., 1 percent to $50.22.
Despite the general retreat, the economic future appeared to grow just a bit brighter Thursday.
The Conference Board’s Leading Economic Index rose 1.1 percent in December, following a 1 percent gain in November and a 0.3 percent uptick in October. The index, comprised of 10 indicators such as initial claims for unemployment, building permits and consumer expectations, has risen steadily for nine months.
“The indicators point to an economy in early recovery,” said Ken Goldstein, economist at the research group. “The leading economic index suggests that the pace of improvement could pick up this spring.”
Retailers are hoping for the best but have taken a largely conservative stance, as Target exemplified Thursday. The discounter laid out plans to spend about $1 billion to remodel 340 stores this year, but plans to open fewer than 10 doors.
• Lauder’s Rise: Running counter to the bearish day experienced by most apparel and beauty related stocks, shares of the Estée Lauder Cos. Inc. jumped 9.2 percent to $53.53 as investors weighed in favorably on the firm’s rosier second-quarter outlook. Late Wednesday, the beauty giant said earnings for the quarter would tally $1.23 to $1.30 a diluted share on sales growth of 10 to 11 percent, projections well above previous guidance. On Thursday, the company said in a regulatory filing with the Securities and Exchange Commission that pretax charges associated with its previously disclosed restructuring and cost-cutting program would be approximately $18.5 million. However, the SEC filing didn’t disclose when the charges would be taken, saying only that they’d be assessed “once the relevant accounting criteria have been met.”
• Tiffany Dividend Boost: Tiffany & Co. Thursday raised its quarterly dividend to 20 cents a share from 17 cents, effective with the next payment in April, and said it would resume stock buybacks after suspending them during the third quarter of 2008. A balance of $402 million remains for repurchases, authorization for which expires next January. Citing its recent report of a 17 percent increase in same-store sales during the holiday season and its upward revision of its earnings outlook, Michael Kowalski, chairman and chief executive officer, said, “Both of these actions today reflect Tiffany’s strong balance sheet liquidity, as well as the board’s confidence in our long-term ability to generate solid growth in earnings and cash flow.” Still, shares of the firm fell 3.1 percent to $41.77.
• Family Dollar’s Dividend Drive: Family Dollar Stores Inc. also upped its regular payout to shareholders, boosting its dividend by 14.8 percent to 15.5 cents a share, payable April 15. Shares of the 6,600-door chain inched up 0.8 percent to $30.81.
• International Markets Mixed: The Nikkei 225 rose 1.2 percent to 10,868.41 in Tokyo and the SSE Composite Index inched up 0.2 percent to 3,158.86 in Shanghai. In Hong Kong, though, the Hang Seng Index fell 2 percent to 20,862.67 and European markets were down, with the CAC 40 sliding 1.7 percent to 3,862.16 in Paris and the FTSE 100 off 1.6 percent to 5,335.10 in London. Global markets slipped Wednesday on fears that Chinese banks would cut back on lending in an effort to keep the country’s economy from overheating.
“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