Investors struggled to find their footing Thursday and pushed retail shares down 0.1 percent as concerns about Washington’s bailout for banks outweighed news that January retail and food service sales rose a seasonally adjusted 1 percent from their poor showing in December.
This story first appeared in the February 13, 2009 issue of WWD. Subscribe Today.
Nearly coming back from larger declines earlier in the day, the S&P Retail Index dipped 0.21 points to 267 as the Dow Jones Industrial Average slid 0.1 percent, or 6.77 points, to 7,932.76.
Shares of Pacific Sunwear of California Inc. rose 11.1 percent to $1.50 as the company’s management continued to be needled by would-be suitor Adrenalina Group, which said it intends to nominate four directors to the specialty retailer’s board. Adrenalina owns 2.1 million shares, or about 3.2 percent, of PacSun.
Adrenalina’s chairman and chief executive officer, Ilia Lekach, sharply criticized PacSun’s leadership as he disclosed his intention to nominate four new directors to the firm’s board. Reached by phone, he said the names of his nominees would be forthcoming. Last year, the three-door Adrenalina tried and failed to acquire the 932-store firm for $5 a share.
In a letter dated Thursday to Sally Frame Kasaks, chairman and ceo of PacSun, Lekach wrote: “We cannot afford, nor can your shareholders afford, to sit idly by while the company, under your command, continues to destroy shareholder value and cause its very existence to be threatened. We hereby demand your immediate resignation from Pacific Sunwear, which is imperative for the company’s survival.”
A call to PacSun seeking comment was not returned Thursday afternoon.
Most specialty players were up, with some of the strongest increases from New York & Company Inc., advancing 16.8 percent to $2.22; Eddie Bauer Holdings Inc., 12.9 percent to 79 cents; Charming Shoppes Inc., 11.8 percent to $1.14, and AnnTaylor Stores Corp., 9.1 percent to $6.46.
In the first trading day after reporting an 84.6 percent drop in first-quarter net income, Gildan Activewear Inc. saw its shares go into a 23.7 percent tailspin, finally closing down $2.42 at $7.79.