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Mall Brands Plunge as Gap, Nordstrom Add to Worries

Mall staples Gap Inc. and Nordstrom Inc. tumbled after reporting disappointing results. Shutterstock.

Mall staples Gap Inc. and Nordstrom Inc. tumbled after reporting disappointing results, adding to a series of worrisome retail earnings and renewing concerns over the global supply chain crisis.

Gap chief executive officer Sonia Syngal cited “acute supply chain headwinds” that left the chain unable to capitalise on elevated customers demand. Nordstrom faced similar challenges, with its stores short of key items such as women’s shoes and apparel.

The issues underscored the challenges retailers face in what is proving to be a tricky holiday shopping season. Some stores have started stocking extra inventory and encouraging customers to shop early to avoid issues with expected stock shortages. Retail chains are also grappling with rising costs, a tight labour market and ongoing challenges from the Covid-19 pandemic.

Gap shares fell 17 percent as of 5:55 p.m. Tuesday after regular trading in New York, while Nordstrom plunged 23 percent. Mall-based peer Abercrombie & Fitch Co., which reported results prior to the market open, fell 13 percent Tuesday. Urban Outfitters Inc. slipped 9 percent after its earnings report.

Companies are largely being judged on how they’re dealing with supply-chain pressures and higher costs. Some, including Walmart Inc. and Target Corp., have managed to keep shelves well-stocked, but still have been punished by investors for not passing along all the new expenses to customers.

Not every retailer has stumbled. Macy’s Inc. soared last week after raising its forecast and topping estimates, while rival Dillard’s Inc. also won praise for its success in navigating the snarled supply chain.

By Richard Clough

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