Long-awaited signs of life in the job market pushed retail stocks up 1.4 percent Monday, nudging the sector to a high not seen since November 2007.
The markets were closed for Good Friday when the Labor Department reported a 162,000 rise in payrolls from February to March, but investors made up for the lost time by snapping up retail stocks on Monday.
The S&P Retail Index traded as high as 458.06 and ended with a 6.26-point rise to 457.87. The Dow Jones Industrial Average saw a lesser gain of 0.4 percent, or 46.48 points, to 10,973.55. Blue-chip stocks haven’t traded above 11,000 since October 2008. Across the Pacific, the Nikkei 225 rose 0.5 percent to 11,339.30 in Tokyo, although most other international exchanges were closed for Easter Monday.
Of the 172 stocks tracked by WWD, Movado Group Inc. led the way, jumping 15.6 percent to $12.85.
Also on the rise were Phillips-Van Heusen Corp., up 3 percent to $60.03, and The Talbots Inc., ahead 1 percent to $13.71. Both companies are working their way through the final stages of business combinations.
After the markets closed, PVH reported it had cleared a routine regulatory hurdle in its proposed $3 billion takeover of Tommy Hilfiger. The firm said the Justice Department and the Federal Trade Commission granted an early termination of the waiting period under the Hart-Scott-Rodino antitrust act. The deal is expected to close during the second quarter.
Talbots, however, hit the same hurdle for a sixth time and once again extended a warrant exchange offer necessary for it to close its deal with BPW Acquisition Corp. The retailer extended the offer until 6 a.m. Monday and the deadline passed without word from Talbots. As of the previous deadline Friday, 88 percent of the warrants issued when BPW went public had been tendered. Ninety percent are required for the deal to go through, and the clock is ticking.
FBR Capital Markets analyst Adrienne Tennant said it appeared the deal needs to be consummated before April 15, when Talbots has to file its annual report with the Securities and Exchange Commission.
“We believe the success of the deal is in the hands of the warrant holders,” Tennant said. “We would urge any holdouts to carefully consider the benefits versus the costs of this ongoing standoff. Without a deal, the warrants are rendered worthless, BPW common stockholders would not have a deal and the [Talbots recapitalization] is not accomplished.”
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