NEW YORK — Inflation fears and a slight uptick in consumer prices had investors pulling out of the stock market last week.
As a result, the WWD Composite Stock Index fell 1 percent in the shortened holiday week, closing Thursday’s session at 1,130.18 from 1,141.98 the prior week. Among broader indices, the S&P 500 dipped 1.5 percent to 1,171.42 and the S&P Retail Index gave up 1.1 percent to close at 421.59. The New York Stock Exchange and Nasdaq were closed on Friday for the Good Friday holiday.
Talk on the Street during the short trading week were mergers and acquisitions. At the Merrill Lynch Retailing Leaders Conference, retail executives discussed potential impacts from the impending Federated Department Stores-May Department Stores merger.
J.C. Penney Co.’s Bob Johnson told conference attendees that the department store chain could benefit from the merger should the combined company cater to a more upscale customer. Johnson, director of investor relations at J.C. Penney, said the company could be interested in buying overlapping stores should Federated decide to sell them, according to Merrill Lynch analyst Daniel Barry in a research report.
Jones Apparel Group chief executive Peter Bonaparth said he thinks the Federated-May merger could give way to an improved distribution channel, but he recognized the integration won’t be easy, said Merrill Lynch analyst Virginia Genereux in her note. Bonaparth is concerned that May will be in “limbo” for most of this year, and Federated could move too quickly next year to upgrade existing May stores. Jones derived 26 percent of its revenues in 2004 from Federated and May.
Shares of J.C. Penney closed the week up 0.7 percent at $46.04, while shares in Jones Apparel Group closed Thursday at $31.76, down 0.7 percent for the week.
Meanwhile, massive savings on manufacturing costs anticipated after the removal of quotas on China aren’t likely to materialize, according to analysts who recently visited the country.
According to Wachovia Capital Markets analyst Joseph Teklits, labor shortages and rising costs for electricity and raw materials are putting pressure on Chinese factories. “[Wal-Mart] is saying that it will see 12 percent to 15 percent savings from the removal of quota this year, but all of the companies we met with said that level of saving is on the extreme side of possibilities and could only be achieved with aggressive tactics [focused on price over all else],” said Teklits in a research report released March 21. Teklits also noted the belief that new safeguards on apparel imports from China would be imposed had prevented Chinese factories from being flooded with new orders.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
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