New York—Some Wall Street analysts referred to it as a “frat boy fight” this week when William Ackman, the hedge fund founder and largest shareholder in JCPenney, resigned from the board of directors after a very public dispute. Now JCPenney—which reports its second quarter next week—can devote energies to the pressing issue of turning its business.
However, JCPenney isn’t the only retailer concerned about its business for back to school, even holiday. Citing a pullback in discretionary spending by its customers, Walmart lowered its profit expectations for the year. Surprisingly, Macy’s Inc., too, scaled back its full year forecast for similar reasons. Even sourcing giant Li & Fung blamed a slowdown by its U.S. customers as a primary reason for its dismal first half results
Apparel, Accessories Sales Up for July
Not that there weren’t any bright spots this week. Clothing and accessories sales edged up in July leading other merchandise categories tracked by the U.S. Department of Commerce. Since July sales are typically among the lowest of the year that bodes well for back to school sales and beyond, believe some analysts.
Said Michael Brown, economist at Wells Fargo Securities LLC: “We’re seeing sales pick up in multiple categories—that’s a promising sign that consumer spending might be a little bit stronger in the third quarter.”