Retail shares rebounded 2.5 percent Wednesday, but lagged the broader market as stocks recovered from concerns that the banking sector might need to be propped up anew.
This story first appeared in the January 22, 2009 issue of WWD. Subscribe Today.
The Standard & Poor’s Retail Index rose 6.46 points to 269.36, as the Dow Jones Industrial Average advanced 3.5 percent, or 279.01 points, to 8,228.10.
The jump followed a 5.9 percent drop in retail shares on Tuesday, their worst showing since Dec. 1. The sector was pulled down as investors worried the government might have to take even deeper positions in the nation’s banks.
Among the decliners Wednesday, Dallas-based jewelry retailer Zale Corp. stood out with a 27.4 percent drop to $1.72, a new all-time low. Over the past year the stock has traded as high as $30.89. Late Tuesday afternoon, Zale said chief financial officer Rodney Carter had left the firm and that its controller, Cindy Gordon, would pick up his duties on an interim basis.
“The board and management asked for Mr. Carter’s resignation,” said David Sternblitz, Zale’s vice president and treasurer, in an interview. “They wanted a different skill set in a cfo in this type of an environment.”
Sternblitz said Zale was looking for a financial chief to help further its efficiency and restructuring programs, adding that Carter’s departure did not signal any lack of confidence in the firm’s accounting practices or financial position.
Late Wednesday, Moody’s Investors Service lowered The Bon-Ton Stores Inc.’s credit rating to “B3” from “B2,” one tick lower within the “highly speculative” category, with a negative outlook. Earlier in the day, the regional department store retailer’s stock fell 7 cents, or 5.3 percent, to $1.25.
Retailers picking up ground for the day included J. Crew Group, up 10.6 percent to $9.99; Nordstrom Inc., 8.5 percent to $13.03; Urban Outfitters Inc., 6.1 percent to $15.93; Macy’s Inc., 6.1 percent to $9.26; The Dress Barn Inc., 5.8 percent to $9.16; Bebe Stores Inc., 5 percent to $5.70; Target Corp., 4.9 percent to $34.14, and Hot Topic Inc., 4.8 percent to $8.71.
Shares of many vendors also perked up Wednesday, including those of Kenneth Cole Productions Inc., up 13.7 percent to $6.98; True Religion Apparel Inc., 8.3 percent to $11.62; Warnaco Group Inc., 6.8 percent to $20.80; Liz Claiborne Inc., 6.7 percent to $2.23, and VF Corp., 4.5 percent to $54.48.