By and  on June 17, 2010

Retail stocks slipped 0.8 percent Wednesday as investors continued to search for direction following weeks of turmoil, when the U.S. recovery was called into question and Europe’s debt crisis was watched nervously.

The S&P Retail Index fell 3.49 points to 438.20, its first decline for the week.

The Dow Jones Industrial Average spent most of the day in the red, but ended ahead 4.69 points to 10,409.49. Energy stocks rallied on news that BP would suspend its dividend and set aside $20 billion to help victims of the Deepwater Horizon oil spill.

Polo Ralph Lauren Corp. priced the secondary public offering of 9 million shares owned by chairman and chief executive officer Ralph Lauren at $81 a share. The stock had been trading above that, but fell 2.8 percent to $80.12 Wednesday.

J.P. Morgan, Goldman Sachs & Co., Deutsche Bank Securities and UBS Investment Bank are underwriting the offering and have a 30-day option to purchase up to an additional 1.4 million shares of Lauren’s personal holdings. Polo also is buying 1 million shares from Lauren at $81 apiece.

The stock offering could raise $919.4 million for Lauren, who will continue to control the company.

Shares of Quiksilver Inc. rose for the second straight day, perking up 1 percent to $4.89 following word Tuesday that the company inked a $75 million debt-for-equity exchange with private equity firm Rhône. Moody’s Investors Service put the firm’s “B3” corporate family credit rating and its “Caa2” senior unsecured note rating on review for possible upgrade Wednesday. The debt watchdog said it would consider the impact of the deal and headway the firm has made in its gross margins.

European investors pushed the CAC 40 up 0.4 percent to 3,675.93 in Paris, as the FTSE 100 rose 0.4 percent to 5,237.92 in London and the DAX advanced 0.3 to 6,190.91 in Frankfurt.

The Nikkei 225 shot up 1.8 percent to 10,067.15 in Tokyo and the Hang Seng Index inched up 0.1 percent to 20,062.15 in Hong Kong.

In Washington Wednesday, the Labor Department said the Producer Price Index prices for U.S.-made apparel were flat in May compared with April and rose 0.2 percent from a year earlier.

Women’s apparel prices were also flat in May compared with a month earlier, but declined 0.3 percent year-over-year. Men’s apparel prices dropped 0.1 percent month-to-month, but rose 0.8 percent from May 2009.

Falling energy and food prices drove the overall PPI for all goods and services down a seasonally adjusted 0.3 percent in May. The so-called core index, which excludes volatile food and energy figures, rose 0.2 percent.

“Inflation is not a concern right now — deflation remains the primary risk,” Nigel Gault, chief U.S. economist at IHS Global Insight.

The PPI for apparel is not a true indicator of industry price fluctuations because the vast majority of clothing sold in the U.S. is imported. The Consumer Price Index, due out today, is a more accurate measure because it reflects the prices of all goods sold at retail.

Domestic prices for women’s knit shirts and blouses, suits and pantsuits and tailored jackets and vests were all flat in May. Knit shirt prices declined 2.7 percent, while suit and pantsuit prices were flat and tailored jackets declined 0.1 percent.

Men’s work clothing prices declined 0.1 percent in May, but increased 2.7 percent from a year earlier. Knit shirt prices were flat month-to-month and were up 1.8 percent compared with May 2009. Prices for men’s suits increased 0.6 percent in May and advanced 1.5 percent year-over-year.

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