The holiday season might have raised hopes only to later deflatethem, but the general retail narrative — as read in fourth-quarterupdates from Tiffany & Co., Sears Holdings Corp., The Talbots, Inc.and Phillips-Van Heusen Corp. — appears to have remained unchanged.
The extremes of luxe, at Tiffany, and mass, at Sears, foresaw betterprofits, while the struggles of the muddled middle were seen in Talbots’projected loss, which sent its stock reeling. PVH illustrated thepotential for growth through acquisition by playing up the impact of itspurchase of Tommy Hilfiger in May.
It was Talbots’ warning thatgot the strongest reaction from investors, who pushed the stock down17.4 percent to $6.25. Despite issuing stronger outlooks, shares of PVHfell 3 percent to $59.94 and Tiffany’s stock dipped 0.6 percent to$60.56. Sears was a standout with a 6.3 percent gain to $75.03, givingit the largest percentage increase of the 171 equities tracked by WWD.
The S&P Retail Index ticked down 0.1 percent, or 0.46 points, to501.27 as the Dow Jones Industrial Average gained 0.3 percent, or 34.43points, to 11,671.88.
■ Talbots, among a number of missy chainsfighting for buoyancy, now expects an adjusted fourth-quarter loss of 15cents to 19 cents a share, down from its previous projection, whichranged from a loss of 5 cents to a profit of 3 cents. Trudy F. Sullivan,president and chief executive officer, said the company would “continueto evolve our strategic approach to achieve our long-term objectivesand remain keenly focused on merchandise initiatives to improve ourassortment.”
■ Tiffany said November and December sales rose 11percent and would lead to adjusted profits of $2.83 to $2.88 for thefull year, moving the company’s previously projected range up 11 cents.“Healthy sales growth was seen across most product categories, withparticular strength in Tiffany’s fine jewelry collections, diamondengagement rings and fashion gold jewelry, although with limited growthin silver jewelry sales,” said Michael Kowalski, chairman and ceo.
■ Sears’ Kmart division posted a 3.4 percent comparable-store salesgain for November and December, driven by the chain’s layaway programand strength in apparel and footwear, sporting goods, toys and home.Comps at Sears U.S. stores fell 5.3 percent for the two months withdeclines in the electronics, appliances and tools areas. Sears projectedquarterly profits of $3.39 to $4.12 a diluted share, well ahead of the$3.09 analysts expected.
■ PVH said adjusted fourth-quarterprofits would tally 82 cents versus the range of 76 cents to 81 centspreviously projected.
With growth slow at best in the U.S.,other fashion companies are expected to follow in the footsteps ofEmanuel Chirico, chairman and ceo of PVH, who orchestrated theindustry’s first big postrecession acquisition: the $3 billion deal tobuy Hilfiger from Apax Partners.
In a presentation at the Cowenand Co. Ninth Annual Consumer Conference Tuesday, Chirico said theHilfiger business exceeded plan and will add about $205 million to PVH’soperating income this year. That’s $25 million more than originallyplanned and the ceo said $20 million of that was added to the brand’sadvertising budget.
Chirico expects the focus on advertisingand branding to leave the company in good stead as cost pressuresfinally work their way through the supply chain and are, at leasttheoretically, passed on to the consumer.
“We’re seeing costincreases for the first half in that 5 percent range, very manageable,”he said. “We’ll raise price slightly and work with our retail partnersand with our customers. Second half of the year, we’re seeing increasesthat are approaching 15 percent, I think everybody’s talking about thesame type of increases in the industry.”
Chirico said it wasstill unclear how the consumer would react to rising prices, but henoted the pricing dynamic change means retailers will have tighterinventories.
Late on Tuesday, Zale Corp. said same-store salesin November and December rose 8.5 percent, with an 11.5 percent increasein November and a more modest 7.4 percent boost in December. Excludingcurrency fluctuation, comps were up 7.6 percent for the season.
Also on Tuesday, Anchor Blue, Inc. filed for Chapter 11 bankruptcyprotection in federal court in Delaware and said it plans “to implementthe orderly liquidation of all the company’s assets.” The plan todissolve the chain confirms details in a previous story in WWD.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion