If you have a lot of money tied up in the retail sector, Oct. 8 was not a good day for you. Gap Inc. (GPS), JCPenney Company Inc (JCP), and others lost big on the day.
Let’s start of by taking a look at Gap. The announcement that CEO Glenn Murphy is stepping down early next year sent GPS into a nosedive.
Along with this change, the company reported flat sales for September. The Wall Street Journal noted the following:
“The monthly result, which the company called disappointing, reflected an unexpectedly deep 3% drop in comparable sales at its Gap stores. The decline was on top of a 3% drop at the Gap brand in September 2013.”
Come Feb. 1, Murphy will be out and current head of Gap’s digital division, Art Peck, will be taking over the reigns. He has his work cut out for him.
Gap stock fell more than 7% in after-hours trading — perhaps rightly so, as Murphy’s contribution should not be overlooked. GPS stock posted a total return of 185% since Murphy took the reins, compared to 55% for the S&P 500.
Other Retail Trouble
JCP didn’t fare any better than GPS, declining 11% for the day and eventually closing a touch over $8. Weak sales during the back to school season did the company in this time around. It will now set its sights on the holiday season.
And then you have Sears Holdings Corp (SHLD), a company that many are expecting to fold up at some point in the near future. A fall of roughly 5% brought SHLD under the $28 mark, continuing a three-month slide of almost 30%. Once again, there are questions surrounding the future of the company, with vendors concerned that the other shoe could drop at any point.
Of the three, GPS is on the most stable of ground. JCP and SHLD have been struggling to keep their respective heads above water for quite some time, with recent declines doing nothing to ease the fear of investors.
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As of this writing, Chris Bibey did not hold a position in any of the aforementioned securities.
