Retail stocks retreated in quiet trading Tuesday following discouraging reports about holiday and housing sales and gross domestic product.
This story first appeared in the December 24, 2008 issue of WWD. Subscribe Today.
The Standard & Poor’s Retail Index fell 3.78 points, or 1.4 percent, to close at 268.87, giving up more ground than the Dow Jones Industrial Average, down 1.2 percent at 8,419.49, or the S&P 500, down 0.7 percent at 863.16.
A report from the International Council of Shopping Centers and Goldman Sachs contributed to the decline in retail numbers. The study said retail sales for the week ended Dec. 20 dropped 0.6 percent versus the comparable week in 2007, although rose 2.6 percent from the previous week.
Michael Niemira, chief economist for ICSC, said that, as of last week, the amount of shoppers who had completed their holiday purchases rose to 80 percent from 63 percent, which helped to drive weekly sales, even though “the year-over-year sales pace remained depressed.”
He said he expects December same-store sales to decrease “1 percent or slightly more.”
Hovering over all sectors of the market, however, was the government’s report of a 0.5 percent decline in third-quarter GDP and a 2.9 percent dip in November new home sales. In addition, the National Association of Realtors said there was an 8.6 percent drop in sales of existing homes, eclipsing expectations.
Some of the biggest declines in the fashion world, however, were linked to credit issues. Liz Claiborne Inc. fell 23.5 percent to $2.28 after S&P downgraded its debt two notches, to “BB-minus” from “BB-plus,” and Jones Apparel Group followed its rival down, declining 20.5 percent to $4.18. Downgraded by both S&P and Moody’s Investors Service after seeking an extension on a loan due on Monday, IT Holding SpA fell 16.7 percent to 0.18 euros, or 25 cents.