More retail earnings will be released next week, and the watch on the talks between the U.S. and China regarding a trade deal will still be ongoing. Resolution of the trade issues will likely take longer than just one more week.
What might be coming out next week from the earnings reports could be how many more stores retailers are planning on closing. This week alone saw Victoria’s Secret stating it was closing 53 locations, J.C. Penney shuttering 18 stores, Gap at 230 stores over the next two years and Footlocker identifying 165 stores that are slated to go dark.
Brexit and other trade deals: If the United Kingdom thought exiting the European Union without a deal was its most pressing matter, the United States just handed them another headache. This week the Trump administration outlined a “wish list” of items for a quick deal, including a tough stance in some categories that calls for certain concessions. Brexit was thought to make it easier to negotiate separate trade deals with countries such as the U.S., China and Japan. How it all shakes out remains to be seen.
Trade war: With the planned hike on tariffs by the U.S. on $200 billion of Chinese imports in a suspended state, the U.S. and China will get more time to negotiate a trade deal. The plan is to hold a “signing summit” when an accord is reached, but when that might happen is anyone’s guess. Reportedly, the two countries have made “real progress” in their discussions.
In the meantime, Wall Street investors have been rattled over the uncertainty, and the fashion and apparel industry, along with the retail sector, has been paying close attention to what they might need to know in case a deal doesn’t get signed. That’s because certain categories, like handbags, already saw a 10 percent hike in September, but the next round was slated to raise tariffs to 25 percent and include a broader range of products including apparel items.
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For the now the official party line from the Office of the U.S. Trade Representative is only that the suspension is in place until “further notice.”
U.S. government reports: On Wednesday, the U.S. Census Bureau and the Bureau of Economic Analysis are due to release the December U.S. International Trade in Goods and Services report. On the same day, the Office of Textiles & Apparel is slated to report on apparel and textiles imports for the month of December. Both reports are delayed due to the government shutdown that began in late December and ended on Jan. 25.
Earnings: There’s no end to earnings season yet, and next week the specialty retailers, along with a few mass discounters and off-pricers, get their turn to tell Wall Street how well the holiday season treated them–or not. Retailers scheduled to report include Kohl’s Corp., Target Corp., American Eagle Outfitters, Abercrombie & Fitch and Burlington Stores.
Fashion Week: Paris Fashion Week ends on March 5.