Although holiday sales outlooks are dour, investors appear to be standing by retailers pushing shares in the sector up 0.9 percent on Monday.
The S&P Retail Index, still near its high for the year, gained 3.60 points to close at 404.15, but retailers lagged the Dow Jones Industrial Average, which advanced 1.3 percent, or 132.79 points, to 10,450.95 in a day of particularly light trading, which is not unusual for an abbreviated holiday week.
Markets were buoyed by a report from the National Association of Realtors showing a 10.1 percent rise in October existing home sales versus September. An $8,000 tax credit that has now been extended to April helped drive existing home sales to an annual rate of 6.1 million — the quickest pace since February 2007.
The indexes rose even as the Conference Board said U.S. households plan to trim spending on Christmas gifts by 7 percent this year and AlixPartners found that 88 percent of consumers plan to spend the same or less this holiday season.
“We see indications of an across-the-board realignment of spending patterns, the birth of what we might call Generation R — ‘R’ for reset,” said Matthew Katz, a managing director and head of the retail practice at Alix.
“We definitely have pockets of improvement, and pent-up demand is evident for some retail categories,” Katz said. “Yet, the bottom is still murky, unemployment is above 10 percent and consumer confidence has quite a way to go.”
The reports on the holiday outlook highlight the continuing concerns about the consumer despite some pickup in discretionary spending. October department stores’ sales rose 0.3 percent from September as specialty store sales inched up 0.4 percent. And analysts saw some momentum in spending on items that were more “wants” than “needs.”
Investors who have been inundated by weak sales predictions for months appear to be taking a wait-and-see approach and hoping retailers can repeat their third-quarter performance, in which better gross margins and lower expenses led to better profits.
The Conference Board said households would spend an average of $390 on Christmas gifts this year, down from $418 last year.
“Job losses and uncertainty about the future are making for a very frugal shopper,” said Lynn Franco, director of the group’s Consumer Research Center. “Retailers will need to be quite creative to entice consumers to spend, both in stores and online this holiday season, as consumers most certainly will expect major markdowns and bargains.”
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia