Even with Europe tilting toward recession and the slow U.S. recovery is slowing further, investors are embracing fashion with open arms.
The latest to the party is Italian cashmere firm Brunello Cucinelli, which made its debut on the Milan bourse with a bang today. The stock closed up 49.7 percent to finish at 11.60 euros. Cucinelli follows the successful offerings last year of Prada in Hong Kong, Salvatore Ferragamo in Milan and Michael Kors Holdings in New York. Tumi Holdings joined in just last week.
And the trend continues.
West Coast specialty retailer Tilly’s Inc. is expected to bow on Wall Street as early as next week, selling 8 million shares at $11.50 to $13.50 each.
It seems to be a good time to jump into the markets.
U.S. retail stocks are not far from all-time highs, having risen much faster than unemployment’s fallen.
Spurred on by Internet powerhouse Amazon, which gained 15.8 percent to $226.85 on a 34 percent first-quarter sales gain, the S&P Retail Index shot up 3.5 percent, or 22.23 points, to 650.09. The Dow Jones Industrial Average was flattish, increasing just 23.69 points to 13,228.31.
The retail gainers included Tumi, up 4.8 percent to $26.57; Sears Holdings Corp., 3.5 percent to $54.33, and Michael Kors, 3.5 percent to $45.90; Aeropostale Inc., 2.5 percent to $23.05, and Chico’s FAS Inc., 2.5 percent to $15.88.
Investors worried anew about the U.S. economy, which the Commerce Department said grew just 2.2 percent in the first quarter — below expectations and down from 3 percent in the preceding quarter.
European investors were also pushing markets up in the face of bad news.
The FTSE MIB in Milan led the way, closing up 1.9 percent to 14,778.90, followed by the CAC 40 in Paris, which rose 1.1 percent to 3,266.27. The DAX in Frankfurt climbed 0.9 percent to 6,801.32, while the FTSE 100 in London rose 0.5 percent to 5,777.11.
Yoox advanced 8.2 percent to 11.10 euros; Ferragamo and Safilo Group which were each up 3.9 percent, to 17.35 euros and 4.90 euros, respectively. And the Italian footwear firm Geox, advanced 4.8 percent to 2.38 euros.
Prada ended its trading day flat at 50.95 Hong Kong dollars.
The euro traded at $1.32 while the pound went for $1.62 and the Hong Kong dollar traded at 12.89 cents. A government report in Spain showed record unemployment and a downgrade of the country’s sovereign debt by Standard & Poor’s.
And retail sales fell in Germany, France and Italy. The purchasing managers’ index (PMI) for the three countries fell to 41.3 in April, down from 49.1 in March. It was the lowest reading since November 2008, shortly after the collapse of Lehman Brothers.