Press "Enter" to skip to content

Nordstrom, Gap plunge with Street worried about rivals chipping away share

Amnon Free Press/Central Press Syndicate, USA. Read, Enjoy and Share the Latest US News Updates.

November 24, 2021

(Reuters) – Shares of Nordstrom Inc and Gap Inc slumped more than 20% on Wednesday as warnings of product shortages during the crucial holiday season raised fears that the retailers were losing out to better-prepared competitors.

A bunch of Wall Street analysts lowered their price targets, with Wells Fargo nearly halving its target on Gap and Jefferies making the most aggressive cut on Nordstrom.

On Tuesday, Nordstrom said its off-price business – Nordstrom Rack – has suffered severe shortages of women’s apparel and shoes, while Gap flagged up to $650 million in lost sales and cut its annual forecast.

Other News:   Brit Hume: Biden is ‘Clearly Deteriorating, He’s Clearly Senile’

Nordstrom was downgraded to “hold” from “buy” at Jefferies, and Credit Suisse analysts said Nordstrom Rack is not positioned well competitively compared to rivals such as TJX Cos and Burlington Stores.

“Nordstrom will need to re-evaluate its strategy of primarily using Rack to clear end of season goods from the brands that it sells at full-price stores,” the brokerage said.

Other News:   Don’t Be That Guy This Thanksgiving

Nordstrom executives on a post-earnings call said they had not responded “as quickly and as aggressively” enough to have sufficient inventory.

In contrast, other retailers, including American Eagle Outfitters, Macy’s and Target, have chartered container ships, used air freight or ordered in advance to overcome supply-chain bottlenecks to stock their shelves for the holidays.

“In this market, retailers have been rewarded more than usual when they exceed expectations and continue to raise guidance. Gap did the exact opposite and this market has been brutal to retailers who have struggled,” CFRA Research analyst Zachary Warring said.

Other News:   Maryland Governor Larry Hogan announces investigation into Baltimore City Attorney Marilyn Mosby's office amid crime wave, threatens to withhold funding

Shares of Gap and Nordstrom were on pace to open at their lowest in about a year.

Shares of retailers after reporting third quarter results: https://graphics.reuters.com/NORDSTROM-STOCKS/egpbkadnbvq/chart.png

(Reporting by Praveen Paramasivam and Tapanjana Rudra in Bengaluru; Editing by Sriraj Kalluvila)

To continue reading this news article, follow the link to the news website.

For any inquiries, contact Amnon Free Press (Amnon Jobi Jakony) by writing to editor [at] amnonfreepress.com. Discover a world of hyper-local news below.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *