In a week light on economic news, investors remained focused on retail earnings and merger news.
Men’s Wearhouse and Jos. A. Bank announced a deal that would end months of hostile negotiations between the two companies. Men’s Wearhouse will acquire Jos. A. Bank for $65 a share or about $1.8 billion dollars. That is a premium of about 1.3% over Jos. A. Banks’ closing price on Monday. The combined company will have more than 1,700 U.S. stores. Men’s Wearhouse and Jos. A. Bank have been exchanging hostile takeover bids since the fall. Men's Wearhouse (MW) shares closed up over 4.5% while Jos. A. Bank (JOSB) ended the day nearly 4% higher.
In other retail news, shares of J.C. Penney (JCP) popped 3% after Citigroup upgraded the stock to “buy” from “neutral” and raised its price target to $11 a share. Citigroup analysts also said sales will continue to grow and liquidity is no longer a problem for the long-struggling retailer.
Shares of Urban Outfitters (URBN) finished down more than 4% after the company reported mixed results for the fourth quarter and a warning for the current quarter. Earnings per share beat estimates by $0.04, but revenue missed. The company said it is "cautious" about its current quarter due to disappointing sales at its Urban Outfitters stores. Its Anthropologie and Free People brands have performed much better, seeing double digit sales increases in the fourth quarter while the Urban Outfitters chains saw sales decline