Target

Shares of Hudson’s Bay Co. shot up 20.9 percent on New Year’s Eve as the on-again, off-again deal to take the company private seemed to be on again.

It was a late-year boost that helped the Saks Fifth Avenue parent run with the companies leading the fashion pack in the market — at least for a time. Shares of Hudson’s Bay, which trades on the Toronto Stock Exchange in Canadian dollars, ended the year up 31.7 percent to $9.88. 

WWD reported late Monday that executive chairman Richard Baker and a group of shareholders were close to sealing a deal to take the parent of Saks Fifth Avenue private for more than the $10.30 (Canadian) a share minority shareholders initially balked at. Baker and his partners hold 57 percent of Hudson’s Bay’s stock and want to buy out other investors using proceeds from the 1 billion euro sale of the company’s European operations last year.

But that is more of a last-minute sprint than a sustainable pace for the department store operator, which has been struggling like the other traditional retailers that have been lagging far behind the market.

The other fashion companies from around the world that topped the Dow Jones Industrial Average’s 22.2 percent gain last year — a period that saw Blue Chip stocks repeatedly hit new highs — came from the worlds of discount, off-price, activewear, tech and luxury. 

This follows the trend of the last decade that saw traditional retailers in the middle of the market and at the mall continue to struggle to adapt to a world that is much more digital and coming to terms with new consumer demands, including a different in-store experience and a more sustainable footprint.

The stock swings for the year show just which companies are surging ahead as the decade begins. 

And right now, Target Corp. is the company to watch, with a 93 percent stock run-up in 2019 to $128.21. That gave the retailer a market capitalization of $65 billion and plenty of leeway as it seeks to keep evolving its business. 

That includes updating its supply chain and how it plans inventory and automating its distribution centers, but it starts with making sure people are still coming to its stores. 

“We focus first on driving traffic in our business because it indicates the continued relevance of our brands and growing engagement among our guests,” said Brian Cornell, Target’s chairman and chief executive officer, after the firm topped estimates with third-quarter results in November. “The real health we’re seeing in overall traffic growth will translate into a guest who’s shopping more categories.”

Clearly Target is doing something right. Its third-quarter comparable-store sales grew 4.5 percent, on top of a 5.1 percent gain last year. 

Lululemon Athletica Inc., LVMH Moët Hennessy Louis Vuitton and Estée Lauder Cos. Inc. are also finding plenty of traction and favor among investors with stock price increases of more than 50 percent last year.

Headed in the other direction are mostly retailers still trying to find their way. Macy’s Inc., Gap Inc. and Victoria’s Secret-parent L Brands Inc. all logged declines of more than 30 percent.

And Farfetch is also still working to get out of the investing doghouse after its pivot with the New Guards acquisition and some signs of weakness with its business sent the stock down 40.4 percent for the year.

Stocked Up for 2020

While traditional retail is still struggling, many fashion companies came out of 2019 with some momentum in the market.

Company Stock Price 12/31/19 One-year Change
Target Corp. $128.21 93.0%
Lululemon Athletica Inc. $231.67 87.8%
LVMH Moët Hennessy Louis Vuitton € 414.20 63.5%
Estée Lauder Cos. Inc. $206.54 56.5%
Hennes & Mauritz 190.48 SEK 49.9%
Stitch Fix Inc. $25.66 47.4%
Kering € 585.20 45.3%
Inditex € 31.45 40.2%
VF Corp. $99.66 39.7%
Hermès International € 666.20 39.5%
Nike Inc. $101.31 36.8%
TJX Companies Inc. $61.06 36.7%
Hudson’s Bay Co. CA$9.88 31.7%
Burberry Group £22.05 27.8%
Prada HK$32.20 27.5%
Walmart Inc. $118.84 27.3%
Dow Jones Industrial Average 28,538.44 22.2%
Nordstrom Inc. $40.93 -13.8%
Canada Goose Holding Co. $47.01 -21.2%
Tapestry Inc. $26.97 -21.6%
Kohl’s Corp. $50.95 -24.9%
L Brands Inc. $18.12 -31.1%
Gap Inc. $17.68 -31.3%
Farfetch $10.35 -40.4%
Macy’s Inc. $17.00 -44.7%
Source: S&P Capital IQ
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