Sector Snap: Some retailers fall, shoppers wary

posted: 71 DAYS 15 HOURS AGO

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NEW YORK -A variety of retail stocks faltered Monday as certain segments of the industry continued to struggle heading into the holiday shopping season.

While analysts were mixed as to how retailers fared over the Black Friday weekend, which is traditionally the start of the holiday shopping frenzy, some components of the retail sector that have been pressured all year continued to show signs of weakness.

Recession weary shoppers have shied away from big-ticket purchases at jewelry stores this year, instead trading down to lower-priced items like fashion silver and gold pieces. This trend is expected to continue into the holidays, as consumers worry about the job market and other economic concerns. Shares of Zale Corp., which reported a fiscal first-quarter loss last week, dropped 40 cents, or 7.9 percent, to $4.68 in afternoon trading.

Traditional book stores also have their work cut out for them this holiday season, with shoppers increasingly flocking to discounters and online retailers to make their book purchases. Last week both Barnes & Noble Inc. and Borders Group Inc., the nation's two largest brick-and-mortar book sellers, reported quarterly losses and predicted a difficult holiday season due to increased competition. Barnes & Noble's stock fell $1.29, or 5.3 percent, to $23.10, while shares of Borders Group shed 16 cents, or 10.6 percent, to $1.35.

A mix of department store operators — including J.C. Penney Co., Macy's Inc., Nordstrom Inc. and Saks Inc. — also saw their stocks slip Monday afternoon. Todd Slater of Lazard Capital Markets said in a client note that the women's ready-to-wear section at Macy's and its Nautica coats didn't appear to be selling well, with items like shoes and accessories instead bringing in traffic. Department store operators like Macy's and J.C. Penney have had to walk a fine line during the recession, trying to come up with the right mix of prices and products that will appeal to bargain hungry shoppers.

Macy's stock declined 93 cents, or 5.5 percent, to $16.03, while shares of J.C. Penney slipped $1.24, or 4.2 percent, to $28.33.

Luxury retailers like Nordstrom and Saks have also had to worry about shoppers in search of bargains, as many consumers have started to trade down to discount retailers like TJX Cos., which runs stores including T.J. Maxx, Marshalls and HomeGoods.

But KeyBanc Capital Markets' Edward Yruma was upbeat on Nordstrom, saying his Black Friday observations showed the retailer experienced slightly better traffic than a year ago and had a good amount of the popular UGG boots.

Nordstrom's shares fell $1.09, or 3.2 percent, to $32.93, while shares of Saks slid 52 cents, or 8 percent, to $6.01.

2009-11-30 13:11:06