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U.S. retail stocks slide on Black Friday as new virus worries arise

Stock MarketsNov 26, 2021 10:06AM ET
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© Reuters.

By Medha Singh

(Reuters) - Shares of U.S. department-store operators slid on Friday as the detection of a new coronavirus variant possibly resistant to existing vaccines compounded woes stemming from low in-store visits and thin holiday season inventories.

Retailers have turned Black Friday, which kicks off the holiday shopping season, into a month-long event this year in the face of supply chain hiccups and a labor squeeze, with customers preferring to shop online since the pandemic began last year.

Macy's Inc (NYSE:M) shed 6%, while Kohl's Corp (NYSE:KSS) and Nordstrom Inc (NYSE:JWN) dropped about 3.5% each.

The S&P 500 slumped 0.8% as the new COVID-19 variant prompted border tightening in the European Union, Britain and other countries, and sent investors flocking to safer assets.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.

"A state of panic around the new COVID variant is terrible news for retailers hoping people would go into their stores to snap up Black Friday deals," said Russ Mould, investment director at AJ Bell.

U.S. apparel retailers Guess (NYSE:GES) Inc, American Eagle Outfitters (NYSE:AEO) Inc, Abercrombie & Fitch Co, Nike Inc (NYSE:NKE), Gap Inc (NYSE:GPS) and Lululemon Athletica (NASDAQ:LULU) Inc dropped between 2% and 6.6%.

"With people getting back into physical stores and making purchases earlier in the holiday season, demand is smoothing out beyond the typical peak shopping days," said Rob Garf, vice president and general manager of retail at Salesforce (NYSE:CRM).

The S&P retailing index slipped 0.2%, coming off an all-time high hit just last week.

"I wouldn't be surprised that if, at least for today, and until we get more information about this new variant, the virus would be reason to sell some retail stocks," said Sam Stovall, chief investment strategist at CFRA Research in New York.

The world's biggest e-commerce company Amazon.com (NASDAQ:AMZN) edged up 0.6%.

U.S. retail stocks slide on Black Friday as new virus worries arise
 

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Comments (2)
Sharon Corley
Sharon Corley Nov 26, 2021 11:28AM ET
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Do you think it's COVID or maybe it's all the smash and grabs going on? It doesn't feel as safe to go to the store... at least not in California. And I know we aren't the only ones experiencing these mobs of theives. They just hit our local mall a couple of nights ago. And, of course, maybe it's a combination... but it definitely doesn't feel as safe currently.
Sharon Corley
Sharon Corley Nov 26, 2021 11:27AM ET
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Do you think it's COVID or maybe it's all the smash and grabs going on? It doesn't feel as safe to go to the store... at least not in California. And I know we aren't the only ones experiencing these mobs of theives. They just hit our local mall a couple of nights ago. And, of course, maybe it's a combination... but it definitely doesn't feel as safe currently.
 
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