Specialty apparel retailers declined on Wednesday, as the broader market continued to slide amid concerns about the financial sector and as an analyst said she expects a difficult fall sales season.
Buckingham Research Group analyst Barbara Wyckoff wrote in a note to investors on Wednesday that demand continues to slow market wide.
"September does not look to be off to a promising start," Wycoff wrote. "Apparel sales appear to be particularly weak."
Many retailers have cut drastically back on inventory in order to sell fewer items at markdown. But Wyckoff said low inventory levels may be hurting same-store sales trends, as consumers can't buy what's not there.
Same-store sales, or sales in stores open at least one year, is a key retail metric because it measures sales at established stores rather than newly opened ones.
However, while low inventory may hurt same-store sales, "the good news is that lower inventory forces merchants to better edit their buys, which should improve overall assortments and margins," Wyckoff wrote.
The analyst said that stores that are not fully dependent on the women's business, but instead offer accessories, home products, gifts, personal care or men's apparel will fare better in the current environment, including Limited Brands Inc., Urban Outfitters Inc. and Fossil Inc.
Meanwhile, specialty retailers followed the market down as financial-sector concerns persisted. In morning trading, the Dow Jones industrial average fell about 250 points.
Shares were down across the sector.
Abercrombie & Fitch shares dropped $3.01, or 6.3 percent, to $45.34.
Urban Outfitters shares fell $1.02, or 2.9 percent, to $34.71.
Limited Brands Inc. gave up 79 cents, or 3.9 percent, to $19.56.
Liz Claiborne Inc. shares shed 98 cents, or 5.6 percent, to $16.67.
Fossil Inc. shares lost 86 cents, or 3.1 percent, to $26.60.
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