Retail stocks are up 50.5 percent since their lows in March, but investors uncertain about when an actual recovery will set in seem unable to push shares higher with any lasting conviction.
The S&P Retail Index inched up 0.6 percent, or 1.91 points Monday, to 336.03. The gain came after a 4.8 percent rise last week. Despite the increases, retail stocks are still down 1 percent from the end of April.
Looking at the rest of the year, Robert Drbul, broadline analyst at Barclays Capital, suggested that investors stick with market leaders with strong balance sheets, management depth and a chance to come out of the recession stronger than when they entered. His top picks include Wal-Mart Stores Inc., Target Corp., Tiffany & Co., Kohl’s Corp. and J.C. Penney Co. Inc.
Shares of Wal-Mart fell 0.5 percent to $50.81 Monday; Target rose 1.2 percent to $40.98; Tiffany dipped 0.4 percent to $29.63; Kohl’s increased 0.6 percent to $46.25, and J.C. Penney saw little change, falling 4 cents to $29.05.
Even for retailers working from a solid base, the second half will not be an easy one. Drbul pointed to a range of challenges in an outlook for the second half. They include increasing gas prices and unemployment, the risks of higher interest rates and tight terms for consumer credit.
“Credit card spending limits are being lowered and managed very aggressively by numerous companies,” Drbul said. “We expect the tough environment to continue into the second half of 2009 and are optimistic that a recovery could begin to occur in [the fourth quarter] and early 2010.”
In Asia, shares of Li & Fung Ltd. gave up some of last week’s 20.8 percent rally and slid 5.2 percent to 23.70 Hong Kong dollars, or $3.06. The stock was buoyed by comments from UBS analyst Spencer Leung, who said the sourcing giant could benefit if U.S. consumers start to trade down to lower-priced goods.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
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24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews