Retail stocks fall on holiday shopping worries

Mon Dec 1, 2008 8:28pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Martinne Geller

NEW YORK (Reuters) - Retailers that offer good value or the hottest products should come out on top this holiday season, while those that need deep discounts to lure shoppers could see earnings pressured, analysts said on Monday.

Fresh from the Black Friday weekend that kicked off the holiday shopping season in the United States, shares in retailers fell sharply on Monday.

The declines struck across the board, from discounters Wal-Mart Stores Inc and Target Corp to department store operators Macy's Inc and JC Penney Co Inc.

The Standard & Poor's Retail Index slid 9.3 percent, more than an 8.95 percent drop for the S&P 500 Index on signs of a deepening economic slump around the world.

Shoppers either went for discounts or specific hot products that don't necessarily need discounts to sell, such as iPods and UGG boots, analysts said.

"While it is difficult to separate the winners from the losers during a period of such low expectations, there were clearly standouts," said Lazard Capital Markets analyst Todd Slater.

He cited Wal-Mart, UGG boot maker Deckers Outdoor Corp, iPod maker Apple Inc and hip clothing chain American Apparel Inc. Slater rates Deckers, American Apparel and Wal-Mart a buy. He does not rate Apple.

Bradley Thomas, an analyst with KeyBanc Capital Markets, said "just about everybody in retail is going to be a loser this year and obviously the stocks reflect that right now."   Continued...

<p>Shoppers make their way through Roosevelt Field Mall during "Black Friday" in Garden City, New York November 28, 2008. REUTERS/Shannon Stapleton</p>