Shares of traditional department stores tumble after-hours as Macy's (NYSE:M) and Kohl's (NYSE:KSS) cut earnings estimates due to weak holiday sales (I, II); Macy's also added details on its previous announcement to close 100 stores, saying the moves will result in 10K job cuts and a $575M reduction in 2017 sales.
The news causes a ripple effect across the sector: JWN -5.9%, JCP -4.8%, DDS -3.4%, SHLD -2.5%, TGT -1.8%, ROST -1.5% AH.
Apparel and accessory companies with significant presences in big box retail also are lower: KORS -2.8%, COH -2.6%, KATE -1.1% AH.
Citing interest drawn from six or so retailers and activist pressure Kate Spade's under, an official auction process is reportedly slated to begin next month with preparations underway through hired financial advisers.
Kate Spade (NYSE:KATE) +3.08% [5%+ intraday from last hour].
If there is a turnaround at Coach (NYSE:COH) it could be due in part to the work of British designer Stuart Vevers.
Vevers has been successful at rebranding Coach, according to W editor Stefano Tonchi. "You say Coach today and you identify not just with a bag, but with a wardrobe," he notes.
Trader Marc Lehman hypothesizes that Coach may consider buying Kate Spade (NYSE:KATE). It's interesting timing with Kate closing at a multi-year low of $14.02 yesterday. Kate Spade has been on the wrong side of the Trump trade due to concerns over import and sourcing policies.
KATE is up 1.78% in premarket action and COH is 2.19% higher.
Clothing and footwear stocks are jetting higher as more analysts bump up expectations on consumer spending in Q4 and broadly forecast tax relief for the consumer goods sector (effective tax rates paid).
Many of the names with the sharpest moves higher today are recovering from a pre-election slump.
Gainers include Sequential Brands Group (SQBG +11.7%), Iconix Brand Group (ICON +5.1%), Carter's (CRI +4.6%), Vera Bradley (VRA +4.6%), Wolverine World Wide (WWW +4%), Crocs (CROX +4.3%), Caleres (CAL +4.6%), Ralph Lauren (RL +3.4%), Fossil (FOSL +5%), Perry Ellis (PERY +3%), Deckers Outdoor (DECK +3.5%), Skechers (SKX +3.2%) and Coach (COH +3.1%).
Kate Spade (KATE +5.9%) is also rallying, but has news of an activist investor on the prowl also factoring in.