Retail stocks surged 2.7 percent Thursday, retaking ground not seen since October, as the Dow Jones Industrial Average broke through the 9,000 mark.
Investors were driven by some encouraging news on earnings, including eBay Inc.’s forecast for better-than-expected third-quarter profits, and word that existing home sales rose for the third consecutive month.
While the economy has shown some signs of improvement, with credit markets rebounding, the toll exacted by a 9.5 percent unemployment rate remains a big question mark for retail.
“Less bad is good enough right now [for investors],” said Marie Driscoll, equity analyst at Standard & Poor’s. “That may well change going forward.”
The S&P Retail Index advanced 9.29 points to 352.53, the first close over 350 since Oct. 1, when global markets were in free-fall and the credit crunch was worsening.
Retailers joining in the rush included New York & Company Inc., up 13.6 percent to $3.60; AnnTaylor Stores Corp., 11.9 percent to $9.60; Coldwater Creek Inc., 11.4 percent to $6.27; Charlotte Russe Holding Inc., 9.5 percent to $14.50; Dillard’s Inc., 9 percent to $9.05; Chico’s FAS Inc., 6.8 percent to $10.83; Nordstrom Inc., 6.3 percent to $25.79; Macy’s Inc., 4.8 percent to $13.28, and J.C. Penney Co. Inc., 0.5 percent to $29.42.
But even the good news supporting Thursday’s rally had a touches of gray.
June home sales did increase 3.6 percent from a year earlier, but the median home price fell 15.4 percent to $181,800, according to the National Association of Realtors.
Retailers now also have to contend with the possibility that Amazon.com will become a more aggressive player in the fashion world after reaching a deal to buy online shoe and apparel merchant Zappos.com.
“This acquisition could put Amazon on a competitive collision course with key department stores,” said Credit Suisse analyst Michael Exstein, pointing specifically to Nordstrom, Penney’s and Macy’s.
Zappos.com, which has sales of about $1 billion and is primarily a shoe seller, could also pressure companies with big footwear businesses, such as Jones Apparel Group Inc.
Pacific Sunwear of California Inc. was one of just a few apparel retailers to miss out on Thursday’s rally. Its shares slumped 10.3 percent to $3.05 after the firm said its second-quarter loss and same-store sales declines would be worse than projected.
The Anaheim, Calif.-based retailer now expects losses of 22 to 24 cents a share instead of the 11 to 17 cents anticipated in May. Comps, originally expected to drop 17 to 20 percent, are now expected to fall about 24 percent.
American Apparel Inc. shares rose 11 cents, or 3.1 percent, to $3.70 in trading Thursday, but the retailer said after the close of the markets that it would restate its 2008 consolidated financial statements, moving $33.4 million of $49.4 million borrowed under its revolving credit facility into current liabilities from the long-term debt category. It said the change to the balance sheet would not affect its previously reported cash position, profits or sales figures.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)