Sterne Agee: Specialty Retail Off To A 'Tough Start' In 2015

Ike Boruchow of Sterne Agee on Tuesday commented that his specialty retail group is off to a “tough start” in 2015, having declined 4.2 percent.

“While expectations had been for a fairly robust holiday, very few companies have actually hurdled the ‘high bar' with impressive results,” Boruchow wrote. “All in, markdowns continue to normalize while foot traffic in January continues to come in fairly strong.”

Boruchow states that the markdowns bode well for retail as the absolute level of discounting remains “fairly elevated” (nearly twice as many ‘more promotional' events than ‘less promotional' events observed.)

The analyst adds that Coach Inc COH held a first-ever winter semi-annual sales; Michael Kors Holdings Ltd KORS offered broader and deeper discounting; Gap Inc GPS featured up to 75 percent off merchandise; Urban Outfitters, Inc.'s URBN Anthropologie featured its biggest discount in over three years with an extra 40 percent off sale items.

On the other hand, L Brands Inc's LB Victoria Secret, Signet Jewelers Ltd SIG and Kate Spade & Co KATE were all observed as being less promotional.