Retail stocks rose 2.7 percent Friday, cementing the sector’s seventh-straight week on the rise despite continued concerns about shoppers and sales.
The S&P Retail Index increased 8.90 points to 338.23 for the day and advanced 1.7 percent for the week. The Dow Jones Industrial Average fell 0.7 percent for the week to close at 8,076.29.
The disconnect between weak sales in stores and rallying markets has been sharp and, in part, a sign of just how far retailers have fallen. Despite their 51.5 percent advance since March 6, retail stocks are still down 37.2 percent from their high in February 2007.
With retailers such as Mervyns, Goody’s, Linens-N-Things, Circuit City and Steve & Barry’s part of the retail graveyard, real estate firms are also getting squeezed as they scramble to fill the space.
The percentage of leased space in Developers Diversified Realty’s shopping center portfolio fell to 90.7 percent at the end of the first quarter, down from 95.6 percent a year earlier. The percentage falls to 88.4 percent — a historic low — when the now-vacant Mervyns is factored in.
“The industry as a whole is expected to see more fallout during the first quarter of 2009, and while there are retailers currently facing severely deteriorating operating fundamentals, a significant portion of our core retailers continue to prove their resilience amid the challenging economic climate,” said Daniel Hurwitz, president and chief operating officer of Developers Diversified. Among the concepts most aggressively expanding with the developer are Forever 21, Nordstrom Rack, Ross Dress for Less, T.J. Maxx and Marshalls.
The company’s funds from operations, a key metric for real estate companies, increased 40.9 percent in the first quarter to $150.6 million, driving shares of the company ahead 11.4 percent to $3.90 Friday. The stock gained 24.6 percent for the week.
Among the top retail gainers for the week was Saks Inc., which managed a 40.7 percent boost to $4.98 after a J.P. Morgan upgrade earlier in the week. Destination Maternity Corp. was also on the way up with a 37.5 percent increase to $10.63 after besting second-quarter expectations.
Shares of Target Corp. fell 1.1 percent last week to $40.08 as the company continued to trade barbs with activist investor William Ackman.
On Friday, Ackman sent a letter to Target shareholders inviting them to attend a May 11 town-hall-style meeting with him and the other four people he’s nominated to the retailer’s board. Ackman, who through his Pershing Square fund controls 7.8 percent of Target, has said his proposed directors have more relevant experience in retail, real estate and credit cards than the company’s nominees.
“The deficit of relevant experience on Target’s board has contributed to the company’s underperformance during this recession,” said Ackman.
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)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
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)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@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