There have been some questions from blog readers about what is causing the huge drop in Garmin (GRMN) and Coach (COH). Here is a quote from a front page article titled "Retailing Chains Caught in a Wave of Bankruptcies" in the New York Times:
“The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.”
Coach and Garmin both sell stuff that people don’t need. Coach even more so than Garmin... Well, my daughter would argue that a new Coach purse is a necessity while a GPS device can be replaced by a map and a compass, so there.
Still, neither makes food, water or air... so in down turns Mr. Market acts like the whole world of retail is ending, and he wants to sell all retail stuff so badly that he begins to dump even the really good ones at lower and lower prices...
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