Vince Holding Corp.’s shares plunged in early trading Tuesday, falling 16 percent to trade at about $10 a share.
The decline stemmed from the news late Monday that chief executive officer Jill Granoff would be leaving the company after a transition period while a successor is sought. Granoff had been with the company for three years and helped steer it through its initial public offering. Vince also reported that it has hired Livia Lee as the senior vice president of merchandising and that Lee will report to Granoff during the transition.
The reaction was swift among the analysts covering the stock. William Blair downgraded the company to market perform, while Piper Jaffray lowered its price target to $12 from $13. Jaffray analyst Erinn Murphy wrote, “Clearly, there is a significant reorganization underway and our sense is that the fundamentals remain in flux. With concern of another guide-down, we are lowering our estimates for 2H and beyond.”
Overall, the stock market had a mixed open as retailers reported that sales unexpectedly dropped in June. The S&P 500 and Nasdaq were up slightly, while the Dow was down due to oil prices dropping. In the retail report, purchases for the month of June decreased 0.3 percent following a gain of 1 percent in May. Briefing.com had forecast a drop of 0.2 percent, while most economists expected a 0.3 percent gain.
The drop was blamed on an early Memorial Day that took away from June’s shopping days. The decline was across the board with demand down for eight of 13 major categories. On the positive side, food services and drinking places were up 7.7 percent, followed by sporting goods, hobby, books and music, which were up 6.6 percent. So, it looks like Americans were spending their money doing summer things like going out to eat, playing and generally spending on leisure activities.
Clothing and clothing accessories came in at $19.2 billion, down from $22.0 billion in May for a drop of 1.5 percent, but an increase of 1.9 percent from last year. General merchandise stores were also down from May with $54.3 billion in June versus $57.0 billion in May.
Elsewhere among retailers, Amazon stock was up 1.1 percent to $460 after an upgrade to a buy from Neutral by UBS analyst Eric Sheridan. He also raised his price target by $100 to $550, firmly placing him in the bull category for the stock. Sheridan cited the fast-growing Prime membership as the reason for the upgrade. He believes the Prime subscriber spends more and Amazon is increasing eligible Prime items, causing more to join.
Sears Holdings named Joelle Maher president and chief member officer. Maher comes to Sears from Gymboree, where she was chief operating officer. Prior to that she worked in several executive positions at Levi Strauss & Co.