{"id":63876,"date":"2025-04-09T02:00:36","date_gmt":"2025-04-09T07:00:36","guid":{"rendered":"https:\/\/www.tradestation.com\/insights\/?p=63876"},"modified":"2025-04-09T08:41:05","modified_gmt":"2025-04-09T13:41:05","slug":"retailers-ground-zero-tariffs","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2025\/04\/09\/retailers-ground-zero-tariffs\/","title":{"rendered":"Are Retailers Ground Zero for Tariff Wars?"},"content":{"rendered":"

Retail stocks are plummeting as tariffs threaten decades of supply chains and manufacturing.<\/p>\n

Today’s story focuses on VF (VFC), the parent of brands like North Face and Vans. However most of the trends apply to larger peers like Nike (NKE), Target (TGT), Lululemon Athletica (LULU), Ralph Lauren (RL), Deckers Outdoors (DECK) and Sketchers USA (SKX).<\/p>\n

VFC is in the midst of its worse drop ever, falling 63 percent in the last two months. That dwarfs the selloffs of 2008 (subprime) and 2020 (pandemic). The shares ended yesterday down 13 percent to their lowest level in more than 17 years.<\/p>\n

The descent began on February 28 after President Trump confirmed he would raise tariffs on China. The stock fell again on March 4 after Beijing retaliated with levies on U.S. goods.<\/p>\n

VFC had another leg down\u00a0after April 2, when President Trump announced tariffs of 49 percent on Cambodia, 46 percent on Vietnam and 37 percent on Bangladesh. Like many retailers, VFC relies heavily on those countries for its clothing, footwear and accessories. They take effect today.<\/p>\n

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VF (VRC), daily chart, with select event.<\/em><\/p><\/div>\n

“The new tariffs will lead to higher consumer prices, further pressuring retail volumes,” Fitch Ratings said yesterday as it lowered its credit outlook on the industry. “Some costs are likely to be absorbed by retailers and consumer products manufacturers, which will negatively affect margins.”<\/p>\n

The news could be especially difficult because many companies moved to countries like Vietnam because of tariffs on China during the first Trump Administration.<\/p>\n

Apparel Inflation<\/h2>\n

While U.S. consumers have faced higher prices for years, apparel has been one of the least inflationary categories. Data from the Census Bureau shows the broad consumer price index (CPI) up 89 percent so far this century. Clothing and footwear, on the other hand, have risen less than 1 percent.<\/p>\n

For example, the retail price of running shoes from Vietnam could rise from $155 to $220. That’s according to an estimate by the Footwear Distributors and Retailers of America cited by the Associated Press.<\/p>\n

Americans have been bracing for the increase. Reuters reported yesterday that 73 percent of respondents in a poll expect higher prices in the next six months. That echoes survey data in the University of Michigan’s consumer sentiment index and the Conference Board’s consumer confidence report.<\/p>\n

Investors and economists may see other potentially negative painful effects:<\/p>\n