Biden Boost?
● President-elect Joseph Biden is looking to move on from election season.
Consumers across the U.S. over the weekend cheered the groundbreaking victory of President-elect Joe Biden and Vice President-elect Kamala Harris, but the incoming administration now faces equally historic challenges — from taming the raging coronavirus to unifying the country and getting the still-struggling economy back on track. The last week of election uncertainty didn’t dent Wall Street, which soared above it all, but now the hard work for Biden begins — and the market will be one of the judges.
Now it’s on to what comes next.
If the psychologically bruising presidential election showed a still-deeply divided nation, the weekend suggested America is largely ready to move on even if the political showdown has technically moved from the ballot box to the courts. None of the legal challenges from
President Trump appear to be gaining traction and the Tweeter-in-chief stayed uncharacteristically quiet as Joseph Biden took the mantle of president-elect on Saturday night, making history in myriad ways — from the number of votes he gained (the highest ever for a president), to his age (soon to be 78, making him the oldest man ever elected president) to, above all, his groundbreaking choice of a running mate, Vice President-elect Kamala Harris, the first woman and the first person of color to serve in that post.
But what that means for the economy, brands, consumers, a stock market that soared through election uncertainty, brands, and a world wracked more than ever by pandemic is still a big question mark.
When WWD asked more than 75 fashion industry executives what the first priority of the next administration should be, the short list included more unity, a coordinated approach to the coronavirus and additional stimulus. Speaking at a socially distanced auto-bound rally in Delaware filled with honking horns and red, white and blue, Biden on Saturday promised to deliver on at least the first two of those priorities (a big new stimulus package will depend on Democrats retaking the Senate with runoff elections).
“I pledge to be a president who seeks not to divide, but to unify,” Biden said. “Who doesn’t see red and blue states, but a United States. And who will work with all my heart to win the confidence of the whole people.”
The election result — which still needs to be certified by the Electoral College — proved to be a moment of catharsis for many.
“Faith restored,” wrote Virgil Abloh, OffWhite and artistic director of Louis Vuitton men’s, in an Instagram post that alluded to just how much more there is to do. “As they say, the reward for work well done is the opportunity to do more work.”
But it is still Trump who is in the Oval Office and the President has not conceded the election, leaving some lingering doubt that he could provoke some kind of Constitutional crisis.
“After a long campaign, it is time to respect the results and congratulate the victors across the country who nobly put their names forward for public office,” said Brian Dodge, president of the Retail Industry Leaders Association. “When the final votes are certified, Joe Biden will be the next president of the United States. We offer our best wishes to him and
Sen. Kamala Harris as they prepare for the tough work that lies ahead. Leading retailers are ready to work with Congress and the next administration to defeat COVID-19 and restore economic prosperity for the millions of Americans whose lives and livelihoods have been upended this year.”
Matthew Shay, president and chief executive officer of the National Retail Federation, echoed those comments.
“After a historic and unprecedented election season, the country has selected our next commander in chief through its longstanding democratic process,” Shay said. “We must rise above the political rhetoric that has divided our nation and remember we are Americans first. Now is the time to come together and unite around the substantial challenges we face and for the betterment of our country.
“As the largest private sector employer in the country, the retail industry looks forward to continuing our tradition of working with presidents and their administrations of both major political parties to advance the industry’s priorities in job creation, economic development and career opportunities for millions of Americans. We congratulate Presidentelect Biden and Vice President-elect Harris on a hard-fought victory,” he added.
“Throughout this year’s extraordinary circumstances, retailers have shown their resilience and adaptability and will continue to ensure the safety and wellbeing of our customers, the communities we serve, and the 52 million working Americans supported by the retail industry as we enter a busy holiday season.”
Still, if somehow there is another big Trump surprise and the President is able to legitimately contest the election or stir up some of the 70 million people who voted for him, it could be the final straw for the embattled consumer.
“With uncertainty, fear rises with the consumer base and that’s the problem that retailers have to deal with,” said consultant Greg Portell, lead partner in Kearney’s consumer practice.
The unrest that prompted retailers across the country to board up their stores before the election has so far not materialized in any big way, but merchants still find themselves in a position of having to be ready for anything.
“The holiday season has traditionally had a lot of experience,” Portell noted. “You want to see the stores, you want to see the lights, you want to find and explore, you want to hear the, ‘Yes, Virginia, there is a Santa story.”
This year was already going to be vastly different since seeing those Christmas lights was going to be virtual rather than IRL, and post-election-related unrest would reset the whole scene again — as would any wave of lockdowns in the
U.S. similar to those now being seen across Europe as countries there battle a resurgence in the coronavirus. From Italy to France to the U.K., nonessential retailers have been forced to once again shutter their stores for the next several weeks even as they prepare for the holiday season.
“The president-elect and his team will look to quickly eliminate concerns around safety, and rebuild trust, not only among the consumer base, but among the sales associates and the store workers as well,” Portell said of any potential unrest. “Very few people are looking forward to going shopping in a boarded up store. Success this holiday hinges on a confident, and hopeful, consumer.”
Beyond the immediate calls to accept the election results and start to move on, one of the first real reads on the future from the business world will be from
Wall Street. Stocks rallied last week even as the rationale changed, with investors betting first on a big “blue wave” win for Democrats and trillions of dollars in stimulus spending and then shifting to the idea of more moderate change in Washington that at least wouldn’t push through big tax hikes or risk inflation.
Despite some downward pressure Friday, the Dow Jones Industrial Average shot up 6.9 percent last week to 28,323.40 as the S&P 500 Retailing Industry Group advanced 8.1 percent to 3,544.
The strongest consumer stocks beat the market overall, including Farfetch, up 51 percent to $42.48 after forging a deal with Alibaba and Compagnie Financière Richemont; RealReal Inc., 24.1 percent to $15.62; Capri Holdings Ltd., 17.6 percent to $24.95; Gap Inc., 10.2 percent to $21.43; Tapestry Inc., 9.4 percent to $24.32; Abercrombie & Fitch Co., 9.2 percent to $15.53; Amazon Inc., 9.1 percent to $3,311.37; The Estée Lauder Cos. Inc., 8.6 percent to $238.64; Lululemon Athletica Inc., 7.7 percent to $343.80, and Nike Inc., 7.3 percent to $128.90.
American consumers have proven to be more resilient than most dared to hope this year — bouncing back from the lockdown and pushing through recession to spend more online and, in recent months, venturing back out to stores.
It has been nowhere near even an OK year, but many brands — from Canada Goose to Levi Strauss & Co. and Capri Holdings — managed to bounce back into the black last quarter, in a way transcending the once-in-a-century collision of events that scrambled American life this year.
Even Wall Street has warmed again to many names in a sector it had left behind, opting out brick-and-mortar anchored brands and falling in life instead with their pure-play competitors.
The tenor of the market should continue to change as investors readjust to a world where big policy and political news no longer lasts only until the next tweet.
BlackRock Investment Institute said in an analysis: “Joe Biden has won the contest for the White House — an outcome that signifies a return to a near-term market environment dominated by low rates, a hunt for yield and growth stocks.... Risks to the outcome [of the election] appear remote, and we prefer to look through any market volatility that legal challenges by President Trump may bring.”
BlackRock said a Democrat-led Senate also looks unlikely, although the possibility will linger until a January runoff election for two Georgia Senate seats.
“A divided government would constrain the Biden administration’s ability to implement plans for large-scale fiscal stimulus and public investment, tax, healthcare and climate related legislation,” said the group, which is part of the private equity giant BlackRock. “We see an increased focus on sustainability under a divided government, but through regulatory actions, rather than via tax policy or spending on green infrastructure. It also would likely signify a return to more predictable trade and foreign policy — even as U.S.-China rivalry is set to stay elevated due to bipartisan support for a more competitive stance.”
With so much still scrambled — from the economy to the consumer psyche to the economy — a little more predictability would be welcome on many fronts. ■