Rob Black's Retail Stock Report

Early in the first e-commerce boom, there was a widespread idea that shoes just didn’t fit in. No one wanted to buy shoes online, the thinking went, because getting a pair to fit is tricky and no one wants the expense and hassle of returning shoes through the mail.

That conventional wisdom was upended by Zappos.com as sales for the privately held company are on track to reach $600 million, up from $370 million last year. The shoe market is a $2.9 billion market. Zappos’ success is now enticing Gap (GPS), which is mired in a sales slump, to introduce a new brand Web site called piperlime.com featuring thousands of footwear styles from 150 brands none of which are Gap branded shoes.

Gap selling goods made by other companies is a sharp departure from Gap’s traditional private-label strategy (you can’t buy Levi’s jeans at the Gap, for example) and a shift that could presage further merchandising changes at its Gap, Banana Republic and Old Navy stores.

Wal-Mart (WMT) had its biggest advance in a year after announcing plans to reduce expenses.

Hasbro (HAS), the world's second-biggest toymaker, rose the highest since July after its profit exceeded analysts' estimates.

Petco Animal Supplies (PETC) said its shareholders have approved the company's acquisition by private equity investment firms Texas Pacific Group and Leonard Green & Partners L.P.

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