The stock market closed well before polling stations Tuesday, but investors, cheered by the prospect of soon knowing who the next president would be, pushed retail shares up 3.6 percent.
This story first appeared in the November 5, 2008 issue of WWD. Subscribe Today.
The Standard & Poor’s Retail Index advanced 10.53 points to 300.25, outperforming the Dow Jones Industrial Average, which rose 3.3 percent, or 305.45 points, to 9,625.28.
Despite all the bluster on the campaign trail and the Election Day stock market bump, there’s little sense the preliminary anointing of a new president will have any immediate impact on consumer spending.
“Consumer fundamentals are so bad right now,” said Scott Hoyt, director of consumer economics at Moody’s Economy.com. “You’ve still got declining wealth. You’ve still got big job losses in the pipeline. You’ve still got a significant problem getting cash to spend even if you want to. Even if you get a little better sentiment, I’m not sure that shows in cash registers.”
Columbia Sportswear Inc.’s shares were up 73 cents, or 2 percent, to $36.88 before the company said after market that it would cut its workforce by about 75, representing about 4 percent of its 1,800 U.S. employees. Tim Boyle, president and chief executive officer, said the firm has seen an 11 percent decline in spring orders and Columbia expects U.S. market conditions to remain challenging through next year.
Even with stock gains on Tuesday, retail shares have a lot of ground to make up, having fallen 32.6 percent from their 52-week high, reached in December.
Broadline retail stocks on the way up on Tuesday included Target Corp., rising 5.2 percent to $41.35; Kohl’s Corp., 4.9 percent to $35.06; Sears Holdings Corp., 4.3 percent to $57.05; Nordstrom Inc., 3.3 percent to $16.92, and J.C. Penney Co. Inc., 2.7 percent to $23.18.
The specialty store sector, however, was rife with declines, led by Coldwater Creek Inc.’s 24.1 percent drop to $2.59 following the preannouncement of an unexpected third-quarter loss and the withdrawal of fourth-quarter guidance. Other decliners included The Talbots Inc., down 10.3 percent to $8.26; Charlotte Russe Holding Inc., 8.1 percent to $8.31; Dress Barn Inc., 5.1 percent to $8.85; Bebe Stores Inc., 4.2 percent to $7.97, and American Eagle Outfitters Inc., 3.1 percent to $10.57.
Vendors had a mixed showing for the day, with Kenneth Cole Productions Inc. off 9.5 percent to $11.25 before reporting a third-quarter loss; Jones Apparel Group Inc., down 3.5 percent to $10.53, and Liz Claiborne Inc. off 1.3 percent to $7.43.