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Winners and Losers in the Market Capitalization Game

Trading Places<br><br><br><br>A company’s market capitalization is the total dollar value of all outstanding shares. It’s calculated by multiplying the number of shares times the current market price. Here are the top 10 winners and losers...

Trading Places

A company’s market capitalization is the total dollar value of all outstanding shares. It’s calculated by multiplying the number of shares times the current market price. Here are the top 10 winners and losers in the market cap game. Companies had shares with a total sum value of $50 million or more as of Feb. 1, with significant businesses in women’s apparel and/or accessories.

WINNERS

1

HOT TOPIC

Market Capitalization as of Jan. 31, 2003: $757.7 million; as of Aug. 31, 2002: $552.6 million; percent change: +37

Teen spending may be down, but Hot Topic’s still sizzling. The company’s 27-unit Torrid division has gotten an enthusiastic reception from plus-size teens. Besides, experts believe the ever-acquisitive consumer segment will be back with money to burn as soon as the economy improves.

2

QUIKSILVER

Market Capitalization as of Jan. 31, 2003: $712.7 million; as of Aug. 31, 2002: $525.5 million; percent change: +35.6

In 2002, the 30 stocks that make up the Dow Jones Industrial Average fell by 16.8 percent, while shares in the broader Standard & Poor’s 500 index retreated 23.4 percent. Quiksilver bucked the trend, posting a 55 percent gain, underscoring the continuing fascination with surf culture.

3

COACH

Market Capitalization as of Jan. 31, 2003: $2.88 billion; as of Aug. 31, 2002: $2.19 billion; percent change: +31.6

Coach’s stock was given a boost when the company reported that profits in the second quarter ended Dec. 28 rose 41.4 percent to $62.4 million, or 68 cents a diluted share, beating previously raised consensus estimates of 66 cents.

4

GAP INC.

Market Capitalization as of Jan. 31, 2003: $13.22 billion; as of Aug. 31, 2002: $10.2 billion; percent change: +29.6

Analysts taking stock of Gap Inc. like what they see — for the first time in quite a while. Improved margins driven by better markdown margins were seen across all divisions in December and same-store sales were up 5 percent.

5

PACIFIC SUNWEAR

Market Capitalization as of Jan. 31, 2003: $904.6 million; as of Aug. 31, 2002: $714 million; percent change: +26.7

Pacific Sunwear proved its worth this holiday season by refraining from price cuts and promotions. The company was rewarded with a 15 percent same-store sales gain in December.

6

ABERCROMBIE & FITCH

Market Capitalization as of Jan. 31, 2003: $2.84 billion; as of Aug. 31, 2002: $2.26 billion; percent change: +25.7

While Abercrombie & Fitch faces sharp competition from Gap and J. Crew, it hasn’t lost favor on Wall Street. The rapid Hollister rollout and promising spring transition line led Thomas Filandro, retail analyst at Goldman Sachs, to upgrade AE’s stock to “outperform” from “in-line.”

7

REEBOK

Market Capitalization as of Jan. 31, 2003: $1.81 billion; as of Aug. 31, 2002: $1.46 billion; percent change: +24.4

Reebok’s income tripled in the fourth quarter, fueled by a rise in apparel sales. The company has reportedly increased its media budget for the core Reebok brand by 38 percent and will support new product launches such as the Rbk line, a fusion of sports with music and entertainment.

8

BEBE

Market Capitalization as of Jan. 31, 2003: $410.7 million; as of Aug. 31, 2002: $344.9 million; percent change: +19.1

Bebe Stores’ fourth-quarter earnings yielded unimpressive results but analysts said the company’s prospects for improved sales are encouraging, citing more fashion in the mix and a new merchandising strategy.

9

COLDWATER CREEK

Market Capitalization as of Jan. 31, 2003: $191.7 million; as of Aug. 31, 2002: $161.4 million; percent change: +18.8

For the three months ended Nov. 2, Coldwater Creek, a multichannel retailer more than tripled its net income, boasting a 262.7 percent increase in profits. Company officials said it was as simple as selling the right merchandise at the right time. Why didn’t someone think of that sooner?

10

AMERICAN EAGLE OUTFITTERS

Market Capitalization as of Jan. 31, 2003: $1.25 billion; as of Aug. 31, 2002: $1.06 billion; percent change: +18.1

AE struggled with declining comps for much of the fall. But the retailer still carries clout with teens. A survey of 500 young consumers by Zandl Group, a New York-based trend and consulting firm, found that two-thirds of teen girls still do most of their shopping in specialty stores such as AE.

LOSERS

1

J. JILL

Market Capitalization as of Jan. 31, 2003: $240.6 million; as of Aug. 31, 2002: $484.4 million; percent change: -50.3

Shares of J. Jill lost more than a quarter of their value on Dec. 8, when the company revealed that sales for the quarter were not reacting as expected to promotions and direct mailings. Its bet on sweaters also failed to pan out.

2

ALLOY

Market Capitalization as of Jan. 31, 2003: $211.5 million; as of Aug. 31, 2002: $420.4 million; percent change: -49.7

Shares of Alloy Inc. plunged by more than half in heavy Nasdaq trading last month, establishing an all-time low, as the teen multimedia network reduced earnings guidance for 2003. Analysts noted that Alloy’s troubles were largely the result of expense misjudgments, not a broken business model.

3

CHARMING SHOPPES

Market Capitalization as of Jan. 31, 2003: $394.9 million; as of Aug. 31, 2002: $775.3 million; percent change: -49.1

The Bensalem, Pa.-based specialty retailer, which operates 2,338 stores, experienced double-digit sales declines at its Lane Bryant division late last year. Fighting back, CS plans to increase advertising and maintain tighter controls over selling and administrative costs.

4

TOMMY HILFIGER

Market Capitalization as of Jan. 31, 2003: $602.4 million; as of Aug. 31, 2002: $1.09 billion; percent change: -44.5

It’s hard to find a silver lining at the $1.8 billion women’s and men’s sportswear firm, where challenges include identifying a suitable successor to president and ceo Joel Horowitz, who will relinquish his post in March 2004. Hilfiger closed or is in the process of closing 37 of its 44 U.S. specialty stores.

5

WILSONS LEATHER THE LEATHER EXPERTS

Market Capitalization as of Jan. 31, 2003: $91.8 million; as of Aug. 31, 2002: $162.7 million; percent change: -43.6

Wilsons The Leather Experts has been hounded by continuing difficulties at its El Portal and Bentley’s travel stores. The company is testing a new merchandising approach in an effort to keep the stores afloat — which will be necessary if Wilsons is to de-seasonalize its business.

6

SEARS

Market Capitalization as of Jan. 31, 2003: $8.51 billion; as of Aug. 31, 2002: $14.38 billion; percent change: -40.8

There were some signs of life in Sears’ retail division as 2002 drew to a close, despite little top-line growth and no improvement in its addled credit unit. The credit business posted declining profits in the fourth quarter and is expected to continue on its downward path this year.

7

GOODY’S

Market Capitalization as of Jan. 31, 2003: $113.6 million; as of Aug. 31, 2002: $185.6 million; percent change: -38.8

The economy, an impending war and the lingering effects of Sept. 11, 2001 all took their toll on Goody’s Family Clothing Inc. The Knoxville, Tenn.-based moderate retailer reported its toughest year ever. But executives have been heard invoking the “turnaround” word lately.

8

DILLARD ’S INC.

Market Capitalization as of Jan. 31, 2003: $1.30 billion; as of Aug. 31, 2002: $2.07 billion; percent change: -37.1

Dillard’s is putting more emphasis on its own private label and less on the usual suspects in an effort to distinguish itself from the competition. Executives say the store’s signature merchandise carries better margins, while replacing products with traditionally poor margins.

9

CHRISTOPHER & BANKS

Market Capitalization as of Jan. 31, 2003: $479.7 million; as of Aug. 31, 2002: $742.8 million; percent change: -35.4

Christopher & Banks operates 380 stores in 31 states under the names Christopher & Banks, C.J. Banks and Braun’s. Last year’s West Coast port closures adversely impacted the company, which said fourth-quarter earnings will be slightly below analyst consensus estimates.

10

GUESS

Market Capitalization as of Jan. 31, 2003: $150.8 million; as of Aug. 31, 2002: $228.0 million; percent change: -33.9

Moody’s Investors Service took Guess’ $80 million in debt down a notch in December. The move followed news of a steep reduction in wholesale revenues for the fourth quarter of 2002 and reduced guidance for the full year.

SOURCE: COMPANY REPORTS