A strong earthquake shook northern Japan late on Thursday evening; briefly triggering tsunami alerts and renewed fears which spread through. However, retail stocks resisted the shock thanks to better than expected March´s sales.
European stocks closed in red today, following news around the world, where the European Central Bank raised interest rates, for the first time since July 2008, by 25.0 basis points to 1.25 percent, in addition of news of a new 7.1 magnitude earthquake rocked Japan.
In France, LVMH´s shares shed 1.80% to settle at €111.95, while the FashionUnited Top 100 Index closed at 1,204.08 rising by 6.6 as retailers saw mixed sales performances in March mostly due to the calendar shift of Easter holidays. Since the holidays come three weeks later this year than a year ago, pre-Easter sales for retailers have shifted to April from March. Rising food and gasoline prices as well as colder weather have also softened sales a little, but the impact of all these was not as severe as the market expected.
Among apparel retailers, Limited Brands, operator of the Victoria's Secret and Bath & Body Works chains, said its March comparable store sales rose 14 percent, significantly above the Street expectations of a 1.5 percent growth. This reflected the continued strength of its Victoria's Secret Stores brand, which saw a 19 percent increase.
Gap's March comps dropped 10 percent, as it felt the additional impact of the Japanese quake and tsunami. The Street was looking for a 7 percent decline. "Our overall March performance was impacted by the tragic events in Japan, as well as the Easter shift into late April. Our Company has operated in Japan for more than 15 years, with over 150 stores today, so the devastating earthquake touched all of us at Gap Inc," Chairman and CEO of Gap, Glenn Murphy said.