Wall Street Takes Wait-and-See Approach to Retail Changes

From Wall Street's perch, major overhauls at apparel retailers and vendors have been overshadowed amid the subprime market collapse and sagging consumer...


The only companies that have seen market growth since announcing major corporate changes have been Genesco Inc., Deb Shops Inc. and AnnTaylor Stores Corp.

Concerned about the financial health of the company, Genesco's shareholders approved a $1.5 billion buyout by Finish Line on Sept. 17. Shares jumped 2.4 percent on the announcement, and for the year are up 27 percent, closing at $47.40 on Thursday.

Teen retailer Deb Shops reported on July 27 that Lee Equity Partners will acquire the company for $395 million in cash. While shares of Deb Shops fell 17 cents after the announcement, the company is trading up 3.4 percent for the year-to-date period.

Baby Boomer retailer Ann Taylor recently revealed its new concept, an upscale women's clothing line, and appointed Mark Mendelson to run the division. When Mendelson was appointed on Aug. 13 shares closed up 2 percent to $28.25. For the year-to-date period, Ann Taylor has seen a 9.4 percent increase, closing on Thursday at $35.82.

"There was a reason these companies sought changes in management, or decided to sell the company or some of its line, and in general, it was because the retailers were not performing," Chen said. "And if you look at the ones who are up for the year, I would guess that it's because they have been able to turn sales around."

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