Retail stocks lost some steam Friday, falling 1.5 percent, but the sector gained 9.5 percent during a week when some dared to hope that stores’ shares have neared or reached their bottom.
The S&P Retail Index fell 4.64 points to 296.88 Friday, turning in a better result than the Dow Jones Industrial Average, which dropped 1.9 percent, or 148.38 points, to 7,776.18.
With last week’s almost 10 percent rise, retail stocks are up 6.3 percent for this year. The Dow gained 6.8 percent last week, but is down 11.4 percent in 2009.
The stock market has been buoyed this month by some positive news, including a 22.2 percent rise in February housing starts and a Treasury Department plan to relieve banks of possibly $1 trillion in toxic assets through a public-private partnership. Treasury Secretary Timothy Geithner has been making his case for “better, smarter, tougher regulation” of the financial sector.
But there is little unanimity on when the economy and consumer spending will rebound.
This week, investors will get new readouts on several economic vital signs, including the Conference Board’s consumer confidence index on Tuesday and the Labor Department’s employment report on Friday.
Economists predict the U.S. unemployment rate will rise to 8.5 percent this month, as another 660,000 jobs are lost. Unemployment hit 8.1 percent in February, when 651,000 jobs were lost. It has been 14 months since the U.S. economy added any jobs.
Given that employment backdrop, along with the credit crunch and housing implosion, retailers have continued to struggle, upticks in their stock prices notwithstanding.
Shares of most fashion companies are down at least 40 percent from their 52-week highs and are, in many cases, seen as oversold. Given their lower relative value, day-to-day swings tend to look more dramatic.
Some of the steeper declines came from Christopher & Banks Corp., which fell 27.4 percent to $3.97 after the company said it would post losses for the fourth quarter; Saks Inc., which was down 6.8 percent to $1.93; American Apparel Inc., down 6.7 percent to $3.35, and Limited Brands Inc., down 5 percent to $9.12.
Shares of Dillard’s Inc. fell 5.1 percent to $6.30 after Moody’s Investors Service said the firm had a greater likelihood of default, changing the probability of default rating to “B3” from “B2.” Debt given a rating in the “B” range is considered to be speculative and subject to high credit risk.
Moody’s said the downgrade reflected the firm’s operating losses last year and the expectation that its performance will remain weak given the consumer spending environment. The rating agency also affirmed Dillard’s corporate family rating at “B2,” given the retailer’s unencumbered real estate assets, which could be used to help pay off debt in a stressed situation.
In honor the @CFDA’s announcement of @iamnaomicampbell receiving the Fashion Icon Award at the 2018 #CFDAAwards, which will take place on June 4, here’s a #tbt of the supermodel on @michaelkors’ runway in 1991. #wwdfashion #wwdarchive (📷: George Chinsee)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.