Saks Inc.’s improved financial results won a pat on the back from one ratings agency Tuesday and helped the retailer’s shares, and the S&P Retail Index, hit a new 52-week high in intraday trading.
Moody’s Investors Service lifted Saks’ outlook to stable from negative and upgraded its senior unsecured notes one tick to “B3” from “Caa1,” moving them to the family subject to “high credit risk” from those considered at “very high credit risk” while still keeping them in speculative territory.
The retailer’s shares peaked Wednesday at $8.60, their high in the past year, before settling at the close at $8.48, up 6 cents, or 0.7 percent, in New York Stock Exchange trading. The previous high point for the past year was $8.54 on Monday. The S&P Retail Index gained 1.92 points, or 0.4 percent, to end the day at 446.04, close to its high point of the day, and the last 52 weeks, of 446.17.
“The change in outlook to stable reflects our belief that Saks will improve its operating income and credit metrics over the next two quarters to levels appropriate for its rating,” said Maggie Taylor, senior credit officer at Moody’s, adding Saks’ repayment of its revolving credit facility places less debt in front of the upgraded notes.
The move reflects Moody’s belief that, while credit metrics for the New York-based retailer “will improve but remain weak” in the next year, it will return to operating income from operating losses in that time frame.
Last month, Saks reported a sharply reduced loss for the fourth quarter ended Jan. 30 that, exclusive of one-time charges, translated into a profit of 6 cents a diluted share. While sales fell 3.4 percent, to $811.3 million, and were off 4.8 percent on a comparable-store basis, they were better than results for the full year, when revenues declined 13.5 percent, to $2.63 billion, and comps eroded 14.7 percent. Gross margin in the quarter improved to 36.5 percent of sales from 21.2 percent in the final quarter of 2008.
Enduring the largest decline of stocks monitored by WWD, shares of Movado Group Inc. slid 19 percent to $11.42 following its statement late Monday it expected a fourth-quarter loss, exclusive of charges, to come in at a higher-than-anticipated 28 cents to 32 cents and that, due in part to a tax valuation allowance, losses are expected in the new fiscal year as well.
After beginning the day with a decline, the Dow Jones Industrial Average recorded a sixth consecutive day of increases, ending Tuesday’s session up 43.76 points, or 0.4 percent, at 10,685.91, less than 100 points from the 52-week high of 10,767.15 reached on Jan. 14. Like the S&P Retail, the S&P 500 and Nasdaq Composite both hit 52-week highs during the day and finished up 0.8 percent and 0.7 percent, respectively, at 1,159.46 and 2,378.01.
Helping to buoy stocks in the final two hours of trading Tuesday, the Federal Reserve maintained the target range for the federal funds rate at 0 to 0.25 percent and said economic conditions “are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
Earlier in its statement, the Fed remarked, “Household spending is expanding at a moderate rate, but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth.”
European markets gained traction on rising confidence that nations in the euro zone would come to the aid of Greece as it copes with a debt crisis. Standard & Poor’s Ratings Service reaffirmed its previous credit ratings and removed the nation from CreditWatch, where it had resided with negative implications since December. The decision helped lift the CAC 40 in Paris 1.2 percent to 3,938.95, the DAX in Frankfurt 1.1 percent to 5,970.99 and London’s FTSE 100 by 0.5 percent to 5,620.43. In Asia, Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng Index sacrificed 0.3 percent each, ending at 10,721.71 and 21,022.93, respectively, but the SSE Composite Index rose 0.5 percent to 2,992.84.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast