Saks’s Stock Is Up! So Is Liz Claiborne’s! And Others That Were Doing Really Badly!

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Photo: Photo-illustration: Everett Bogue; Photos:
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After retail stocks swelled 4.4 percent yesterday, investors think the economy's assault on the industry may be nearing its end. For the gods have delivered a great savior, who has been walking among us this whole time: Tim Geithner, whose unveiling of new regulatory framework in the financial-services industry inspired this wave of optimism. The beneficiaries of his deliverance were some of the hardest-hit chains in the downturn. Saks's shares rose 15 percent. Ann Taylor's shares rose 18 percent, Liz Claiborne rose 16.2 percent, Quicksilver rose 18.8 percent, and Macy's rose 10.2 percent.

Geither told the House Financial Services Committee, “What we need is better, smarter, tougher regulation, because we’ve seen the costs of these weaknesses and gaps are catastrophic to the system as a whole.” Those words, in the minds of investors, were more powerful than the news of a 6.3 percent decline in GDP and an increasingly horrific unemployment rate.

So when will the clouds part and the sun's rays drench us in not only warmth, but money? Probably not for another year, say experts. But, economists say, after the first quarter, things probably won't get any worse. The economy is expected to contract 7 to 8 percent in the first quarter and then stabilize, with subsequent quarters showing steady improvement. Growth isn't expected, but at least companies can begin recouping losses. So congrats, Saks! You finally have your cake. Maybe next year you can eat it, too.

Retail Stocks Swell 4.4 Percent Thursday [WWD]