HOPES FOR THE HOLIDAYS PUMP UP E-TAIL INDEX
NEW YORK — The LJR Redbook E-tail Index surged 15.2 percent for the week ended Nov. 26, reflecting investors’ exuberance over prospects for robust holiday business online.
However, John Pitt, director of LJR Redbook, rang a cautionary note. “I expect some very interesting corrections in the e-tail sector during the first quarter, particularly among smaller companies spending heavily on ads,” he said.
“Some e-tailers are allocating one-time [annual] sales to marketing.
“We think online sales will increase between two- and fourfold this holiday over last year, but we don’t know yet who will be the major winners,” Pitt noted.
As a result, he said, “all the hype” over growth expectations has created a broad-based optimism concerning e-commerce stocks.
Mid-single digit to double digit gains were achieved by eight of the 11 components in the e-tail index, with the biggest percentage increases notched by Delia’s, up 41.1 percent, and Bluefly, rising 30.7 percent.
On Tuesday, however, may e-commerce stocks took a tumble from the heights they had reached over the past two months. Bluefly dropped 1 to close at 14 7/16; Delia’s fell 1 3/4 to 11; Amazon.com gave up 5 5/16 to 85 1/8, and eToys slumped 4 1/2 to end the session at 62 7/16.