As August gets underway, Europe might be slowing down for its annual vacation hiatus, but there is plenty of action heating up Wall Street and the retail sector. Here, FN runs down the top stories for the week ahead.
BARNEYS ON THE BRINK OF BANKRUPTCY?
One of 2019’s defining stories has been the wave of retail bankruptcies roiling the industry — from Payless’ dramatic downfall to Charming Charlie’s recent demise. Most of the activity has been focused on the lower end of the market, but the luxury sector is likely to feel the heat when Barneys makes an expected bankruptcy move, which could come as early as this week. The retailer has been facing a liquidity crunch following a rent hike at its Manhattan flagship. Is the potential move a warning sign that the luxury market could be in trouble? Analysts don’t think so. “Luxury is actually doing well; the issue is luxury department stores. Because all luxury players have stand-alone stores, there is little need for consumers to go to a Barneys [store] unless they have a relationship with a salesperson who can provide the same level or better service experience,” Farla Efros, president of consulting firm HRC Retail Advisory, told FN.
UNDER ARMOUR ON TAP
Athletic market watchers are always intrigued by Under Armour’s quarterly report, particularly the company’s uneven North American performance. Sales in the all-important region dipped 3% to $843 million in the first quarter, when the company reversed year-ago losses. Analysts have previously suggested the brand still has its work cut out for it in North America, but they’re more upbeat on the firm than a year ago.
WILL CROCS POP?
It’s the brand everyone loves to talk about. Over the past few years, the Niwot, Colo.-based company has shuttered more than 150 stores as it refocused its business around its Classic clog and invested more heavily in digital marketing and celebrity-centric collaborations. The strategy is paying off, and the company reported a better-than-expected first quarter. Can the momentum continue?
EYEING RALPH LAUREN
The company, in the midst of a turnaround, reported better-than-expected results in May. Analysts are hoping the uptick continues. But one key exec departure could negatively impact the firm going forward. Last week, Valérie Hermann, president of global brands at Ralph Lauren Corp., said she was leaving in September.
Watch FN’s video with designers Tory Burch and Tabitha Simmons.