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Article July 18, 1994

<CR><RD><BR><CS:BOLD>FIRST HALF ROUGH GOING FOR MOST APPAREL STOCKS<BR><BR>Byline: </CS>THOMAS J. RYAN<BR><BR>NEW YORK -- Apparel stocks took it on the chin in the first half of 1994, with more than half of them losing ground.<BR>The declines came...


FIRST HALF ROUGH GOING FOR MOST APPAREL STOCKS

Byline: THOMAS J. RYAN

NEW YORK — Apparel stocks took it on the chin in the first half of 1994, with more than half of them losing ground.
The declines came on top of a poor 1993, when average prices fell 25 percent. Analysts blamed the continued sub-par performance on a depressed stock market overall and a poor business climate for apparel firms.
“Business isn’t very good,” said Peter J. Solomon, who heads his own investment firm. “It’s a little better here and a little worse there, but basically business is very weak and you have to be doing awfully darn well to swim against the tide.”
Of the 43 apparel stocks surveyed from January 1 to July 1, 24 have shown declines, 17 gained ground and two were unchanged.
Most apparel decliners fared far worse than the broader market in the half, when The Dow Jones Industrial Average was off 2.9 percent and Standard & Poor’s 500 Stock Index dipped 4.3 percent.
The gainers among apparel issues primarily reflected new issues or those recovering from disastrous performances in 1993.
The hardest-hit stocks in the half included Garan, losing 10 1/2 to 22 1/4, Oshkosh B’Gosh, down 6 to 13 1/2, and Phillips-Van Heusen Corp., tumbling 11 3/4 to 25 3/4.
Liz Claiborne continued its slide, down 2 1/8 to 20 1/2 in the half after scalping 19 points in 1993. Claiborne posted a 36 percent decline in first-quarter profits. Jones Apparel Group, which lost 8 1/4 points in 1993, was off 1 to 28 7/8, despite reporting a 15 percent gain in first-quarter profits.
Other notable declines on poor performances included Danskin Inc., losing 2 1/8 to 2 1/2; Cherokee Group, shedding 3 1/2 to 1 1/8, and Beeba’s Creations, 3 5/8 to 3 1/2. Bernard Chaus Inc., which lost 4.5 points in 1993, fell 5/8 to 1 7/8. He-Ro Group Inc., down 4 in 1993, slipped 3/4 to 1 1/8. Warnaco Group Inc. slipped 7/8 in the half to 29 1/2 after falling 10 1/2 in 1993.
Fruit of the Loom Inc., which plunged 24 1/2 in 1993, inched up 1 5/8 to 25 3/4 in the half.
The only notable strength has been among new issues, many of which benefited from strong earnings. Tommy Hilfiger Corp., which went public in September 1992 at 15 a share, rose 9 3/8 to close the half at 40 5/8. St. John Knits Inc., which reached the market at 17 in March 1993, climbed 20.4 percent in the half to 28. Cygne Designs, which went public in July 1993 at 10, was up 2 1/4 to 21 1/4 and Donnkenny Corp., which reached the market at 13.25 in June 1993, picked up 5 to 23 3/4 in the half.
Norton McNaughton went public at 14 in February of this year and moved up to 19 3/4. Jalate Ltd. went public at 6 1/2 in March and finished the half at 9 7/8.
Market watchers said stocks should bounce back once a clear sign of a consumer recovery becomes evident.
Solomon said apparel stocks are “out of favor” right now, mainly because “most of them aren’t doing too well.” He expects apparel issues to pick up in 1995.
— Fairchild News Service