Retail stocks bounced back from two DAYS of losses with a 4.5 percent gain Wednesday, but concerns remain that markets will turn down again.
The S&P Retail Index advanced 13.53 points to 314.38, fractionally above last Friday’s close. It was the index’s largest percentage gain since the 6.4 percent rise on March 23. The Dow Jones Industrial Average increased 0.6 percent, or 47.55 points, to 7,837.11.
“The retailers as a whole have generally been relatively strong in this market,” said Paul Nolte, director of investments at Hinsdale Associates. “We’ve had an OK day today, and they’re rallying.”
Nolte attributed the upswing to hopes that the economy has bottomed out, but did not sign on to such hopes himself.
“Although the economy is less worse, we basically did a cliff dive,” Nolte said. “We’re not going down as steeply as we were before. The economy is still going down at a dramatic clip.”
The outlook for some retailers is improving somewhat, but that seems to be more the exception than the rule.
After the market closed, Hot Topic Inc. said its comparable-store sales rose 7.1 percent in March and that fourth-quarter earnings would range from 1 to 2 cents a diluted share. The teen retailer had been looking for results to range from a loss of 1 cent to earnings of 1 cent.
Shares of Hot Topic rose 9.6 percent to $11.76 ahead of the news Wednesday. Retailers will report March comps results today.
“The only other [specialty apparel] companies that could post some decent numbers would be Aéropostale [Inc.] and The Buckle [Inc.],” said equity analyst Jennifer Black, president of Jennifer Black & Associates.
Black said investors have low expectations when it comes to retail performance, and stocks will remain volatile.
Target Corp. also was among the retail stock gainers Wednesday with a 7.3 percent rise to $37.60. The increase came after Target fired another salvo at activist investor William Ackman, who is trying to convince shareholders to elect a slate of five new directors to the retailer’s board at its May 28 annual meeting.
Ackman has pressured the company to spin off the real estate under its stores. His Pershing Square funds are Target’s third largest equity holder, with a 7.8 percent stake. Target said Ackman appears to own about 3.4 percent of the company’s shares and derivatives tied to another 4.4 percent of its shares.
“A substantial percentage of Pershing Square’s interest in Target…is in the form of derivative securities that expire in less than two years,” Gregg Steinhafel, chairman, president and chief executive officer, said in a letter to shareholders. “We believe this form of investment is likely to cause Pershing Square to emphasize short-term performance in Target’s stock — and perhaps to entertain significant risk in an effort to increase the value of those derivatives before they expire — at the expense of Target’s longer-term prospects.”
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“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