Retail stocks started off the week with a 0.8 percent decline as the sector was caught in the general downdraft of European sovereign debt concerns.
The S&P Retail Index fell 4.54 points, or 0.8 percent, to close at 538.19 Monday as the Dow Jones Industrial Average also dropped 0.8 percent, or 94.57 points, to 12,385.16.
Last week started with fears that Italy would be the latest casualty of the rolling European debt troubles. This week, investors began with concerns that the official reading of how well European banks would fare in the event of a financial crisis was overly optimistic.
Although most retail stocks were in retreat, shares of Liz Claiborne Inc. gained 4.7 percent to $5.38 — the strongest increase of the 169 stocks tracked by WWD — on a Bloomberg News report that the company is in the process of trying to sell its ailing Mexx unit. Divesting Mexx would give Claiborne a slimmer profile and a stronger focus on its Juicy Couture, Lucky Brand and Kate Spade brands. A spokeswoman for Claiborne declined comment.
Overall, retail stocks are in a bit of a holding pattern that might well persist until stores report monthly same-store sales results Aug. 4 and then second-quarter earnings results later in the month.
“You’ve got a little bit of a slow-summer phenomenon here,” said Erika Maschmeyer, an analyst at Robert W. Baird & Co.
When investors do tune back in for second-quarter results next month, Maschmeyer said they’ll be looking for back-to-school game plans and readings on the competitive environment and price increases.
“Sourcing costs are going to continue to be an issue even though cotton [costs have] come down,” she said. “We still have to deal with higher costs in the back end of the year.”
Even though low-end consumers, in particular, find themselves besieged by high unemployment, a weak housing market and higher food prices, Maschmeyer said middle and higher-end consumers who account for most of the spending have been “chugging along.”
• Moody’s Downgrades Sears: Debt watchdog Moody’s Investors Service downgraded Sears Holdings Corp.’s corporate family rating to “Ba3” from “Ba2,” leaving the company’s rating three notches into the “junk bond” range. The outlook on the rating is negative.
“The company has seen persistent declines in consolidated revenues over the past few years as well as pressure on operating margins which we believe have resulted from erosion in market share,” Moody’s said in its downgrade. “The negative rating outlook primarily reflects uncertainties around the company’s ability to arrest recent declines in sales and operating margins.”
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty