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.
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)
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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)
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@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