NEW YORK — Although the stock market continued to slide Monday — the Big Board was down 42.61 — Wall Street has found at least one industry it’s bullish about: women’s apparel retailing.

“The problem with apparel last year was weak fashion, and secondarily, a decline in disposable income,” said Daniel D. Barry, senior retail analyst at Merrill Lynch.

Driven by an upturn in the economy, women’s apparel sales should move ahead of men’s, say analysts, who also predicted:

Sales will increase about 5 percent for the year as the demand for hard goods falls.

Department stores should show the most strength, and discounters will also do well, but specialty stores will face some


Last year’s winners should continue to be strong, and last year’s losers will gain from the better climate for apparel.

Analysts predict strength this year at The Gap, J.C. Penney, Sears Merchandise Group and Wal-Mart as consumers continue to search for value.

Nordstrom, May Department Stores and Dayton Hudson Corp. should get a boost from an improved California economy, and Federated is also expected to have a good year.

Some analysts see a rebound at The Limited, Charming Shoppes and Carter Hawley Hale. “With the economy getting up and running, people are getting tired of grunge,” said Thomas Tashjian, analyst at First Manhattan. “We may see development of a more classic, cleancut, preppy look in the younger market as well as the upper tiers.” “A provocative look is going to sell — the kinds of items sold at Limited and Express,” predicted Steven Kernkraut, managing director at Bear Stearns. He forecast continued strength at The Limited’s new businesses, including Victoria’s Secret stores and catalog as well as stabilization at the trouble spots of Lerner, Limited and Express.

These will do better than most analysts are expecting, Kernkraut said. He estimates The Limited’s per-share earnings will be $1.30 for 1994, against $1.08 in 1993. He also expects strong results from The Gap, Penney, Federated, Nordstrom and Charming Shoppes.

“A leading indicator of the change in fashion direction towards women’s wear comes from The Gap,” said Tashjian, citing the chain’s shift from commodity goods to fashion goods. “We’ve seen the customer embrace the change.”

Tashjian predicted per-share earnings of $2.10 for 1994, against $1.78 last year.

Tashjian also expects strong gains from Penney and Sears, which he said pose a threat to specialty stores. He expects 1994 earnings at Penney’s to hit $3.95 a share, compared with $3.55 last year. Sears will be hurt by its Allstate division, but apparel should be strong, and Tashjian projects a slight increase, to $4.40 for 1994 from $4.36. Merrill Lynch’s Barry said he expects 1994 earnings at Nordstrom to be $2, up from $1.71; Dayton Hudson, $5.50 against $4.77, and May Co., $3.05 against $2.65.

“As a long-term turnaround story I like Carter Hawley Hale,” said Barry. He feels CHH will become profitable this year, with projected earnings of 15 cents per share.

“Wal-Mart will grow through physical expansion,” according to Janet Mangano of Burnham Securities, citing the mass merchant’s acquisitions of competitors’ units, including Kmart’s Pace division and Woolworth’s Woolco stores in Canada. She expects Wal-Mart to earn $1.19 per share, against $1.02 in 1993.

Commenting on results so far this year, Mangano was upbeat.

“In March we’ve seen a dramatic turnaround in sales, and the early Easter should add several points to comparable-store sales gains,” she said. “Good sales should generate good earnings gains for the first quarter, getting the year off to a strong start.”

Looking ahead, she noted, “It’s going to be a big spring, and a big year for apparel.”

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