Retail stocks fell 3.6 percent on Monday as analysts predicted comparable-stores sales for October would fall short of even September’s dismal performance.
The Standard & Poor’s Retail Index slid 10.88 points to 289.72. The markets overall sagged only modestly in the run-up to the presidential election today and the Dow Jones Industrial Average dipped just 0.1 percent, or 5.18 points, to 9,319.83.
“The consumer credit crunch and record low confidence [are] likely to make October results the worst since September 2001,” Brian Tunick, specialty store equity analyst at J.P. Morgan Chase & Co., said. “Similar to last month, we expect even the value retailers and off-price retailers to be below plan. Off-mall traffic [was] worse than mall traffic.”
Most stores will report October same-stores sales on Thursday.
Retailers are looking for ways to bring expenses into line with sales trends, which could mean layoffs, said Tunick, adding that AnnTaylor Stores Corp., Chico’s FAS Inc., The Talbots Inc. and Pacific Sunwear of California Inc. were the most likely candidates for home office head count reductions.
In their economic distress, shoppers are heading toward the best deal they can find, according to a report from the Standard & Poor’s retail equity research group headed by Marie Driscoll.
“Moderate-price department stores are losing sales to off-price retailers offering competitive assortments of brand name apparel, accessories and home goods,” the report said. “Better department stores also continue to struggle, as aspirational luxury shoppers remain on the sidelines. Consumers are anticipating heavy discounting this holiday season and are likely postponing purchases of luxury goods.”
Looking further ahead and further back, Todd Slater, equity analyst at Lazard Capital Markets, said it could be the worst October showing since the Great Depression, and November could be even worse.
Slater projected October comps would fall 8.5 percent at specialty stores and 13.8 percent at department stores, while discounters and off-pricers collectively manage a 1.1 percent rise.
“But as bad as October is, we believe November will be worse, thanks to the calendar — Thanksgiving falls five days later — and last year’s comparisons [when comps rose 4.4 percent],” Slater said.
Broadline retailers losing ground in the stock market Monday included Nordstrom Inc., down 9.2 percent to $16.38; J.C. Penney Co. Inc., 5.6 percent to $22.58; Macy’s Inc., 5.2 percent to $11.65; Kohl’s Corp., 4.9 percent to $33.42; Target Corp., 2 percent to $39.32, and Saks Inc., 1.8 percent to $5.89. Standard & Poor’s reiterated its sell recommendation on shares of Sears Holdings Corp., which ended down 5.3 percent to $54.71.
Among the specialty apparel stores showing declines were Abercrombie & Fitch Co., off 6.7 percent to $27; Bebe Stores Inc., 6.1 percent to $8.32; Talbots, 6.1 percent to $9.21; Caché Inc., 5.6 percent to $3.39; J. Crew Group Inc., 5 percent to $19.32; Chico’s, 4.4 percent to $3.25; Pacific Sunwear, 2.6 percent to $3.33, and Ann Taylor, 1 percent to $12.39.
Apparel vendors also had a tough go of it, with declines posted by Liz Claiborne Inc., down 7.6 percent to $7.53; Kenneth Cole Productions Inc., 6.4 percent to $12.43; Warnaco Inc., 6.1 percent to $27.99; Phillips-Van Heusen Corp., 5.8 percent to $23.10, and True Religion Apparel Inc., 5.2 percent to $15.88.
The picture was somewhat brighter in international markets.
European markets moved higher on Monday, with London’s FTSE 100 advancing 1.5 percent to 4,443.28 and the CAC 40 in Paris adding 1.2 percent to end at 3,527.97. PPR declined 4.5 percent during the day, but most European issues locked in gains in a range of 2 to 3 percent. In Milan, IT Holding SpA was up 7.6 percent to 0.28 euros, or 36 cents at current exchange. Hennes & Mauritz enjoyed a 5.1 percent hike to 290 kronor, or $36.53. In Frankfurt, Escada AG jumped 8.6 percent to 0.34 euros, or 43 cents.
Hong Kong’s Hang Sang Index rallied 2.7 percent to 14,344.37, allowing it to recoup ground lost on Friday.
@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)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
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