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R3: REQUIRED RETAIL READING

November 10, 2010

 

 

 

RESEARCH ANECDOTES

  • Burberry continues to push the digital envelope with the unveiling of it latest online effort, custom trench coats.  The ecommerce site, to launch next year, will allow consumers to customize a trench coat of their own in up to 12 million style combinations.  Fabrics, colors, and trim will all be customizable.
  • In honor of Ralph Laurens re-opening of its NY flagship stores, the company is sponsoring a “4D”  public art show tonight.  The spectacle will included music, light projections, an artificial breeze, and the fourth-dimension (fragrance!).  Look for the media to compare this effort to Target’s recent show which rented an entire hotel so performers could dance in every one of the hotel’s windows.
  • In an effort to become a truly global ‘head-to-toe’ brand, FOSL is one of the few retailers planning to aggressively ramp catalog distribution as it expects to mail 20mm this year compared to only 11mm just last year. While the incremental increase will be largely aimed at growing the company’s international sales base, the increased cost of what has become a legacy medium is certainly notable.

OUR TAKE ON OVERNIGHT NEWS

AEO Opens Second Flagship in NYC - American Eagle Outfitters yesterday opened the doors to its second Manhattan flagship, a 24,000-square-foot three-level store at 599 Broadway at Houston Street in SoHo. The store is three times the size of the previous unit a few doors away. The ground level features women’s apparel and accessories, including key items for holiday such as sweaters and cargo pants. Jeggings and skinny jeans are well represented in the denim assortment and are double the presentation of the average American Eagle store. There’s an accessories area with scarves, jewelry, sunglasses, hats, shoes and other seasonal items, followed by New York-exclusive merchandise, including NYC graphic Ts, tote bags, hats, gloves and hooded sweatshirts . The upper level features men’s apparel, including a denim room and an underwear shop. There are two exclusive styles of skinny jeans offered here. The lower level features an intimate Aerie boutique offering bras, boyshorts, boy briefs, tangas, thongs and bikini underwear, as well as “cozy” apparel such as homespun knits, T-shirts, denim and outerwear. <WWD>

Hedgeye Retail’s Take:  Enticed by a free $50 gift card, it’s estimated that 1,000 customers lined up beginning at 4:30am to enter the latest teen apparel haven.  For those not familiar, this location is just 50 feet from ANF’s Hollister flagship.

Polo Appoints New APac President - Mark Daley has been named president of Asia Pacific for Polo Ralph Lauren Corp. He succeeds George Hrdina, who plans to retire after assisting with the transition. Most recently, Daley was chief executive officer of Dean & DeLuca for its U.S. and international markets. Before that, he was group president of worldwide operations and business development at DFS, a division of LVMH. During his 22-year tenure at DFS, he gained extensive experience in the Asia Pacific markets including China, Korea, Japan, Australia and Guam. Daley will report to Jackwyn Nemerov, executive vice president of wholesale brands, licensed products, sourcing, merchandising, home and Asia Pacific at Polo. <WWD>

Hedgeye Retail’s Take:  Food courts coming to Asia?  Probably not, but it’s not often you get a luxury exec crossed with a luxury food service exec.

Hilfiger Taking to the Road - Tommy Hilfiger, a man with an enduring passion for collegiate style, is heading to Britain’s oldest university — Oxford — to address the student union today. Hilfiger follows in the footsteps of Diane von Furstenberg, Roberto Cavalli, Anna Wintour, Emanuel Ungaro and others and is scheduled to give his talk at noon. “I just want to know one thing: Do I pick up my diploma beforehand or on my way out?” he asked during an interview at his Regent Street flagship and showroom here on Tuesday. Hilfiger said he planned to talk to the students about “25 years of Tommy Hilfiger, how we developed the brand, how it’s evolved and how we continue to celebrate it.” He said he planned to work an “American Ivy League” look for the occasion. After the address at Oxford, he’ll head to Copenhagen, Lisbon, Milan and — finally —Paris to open his 8,850-square-foot European flagship on the Champs-Elysées on Nov. 17. Separately, the company on Tuesday revealed plans to open its largest flagship in Asia, a 10,946-square-foot unit in Tokyo that will span three floors and carry the sportswear and runway collections and Hilfiger Denim. The store will open in March 2012 and the company said it will anchor the 108 Tommy Hilfiger stores currently in Japan. <WWD>

Hedgeye Retail’s Take:  With international growth key to PVH’s Hilfiger brand, what better way to spread the preppy lifestyle than to have its 59 year old founder go on a PR tour.

Changes Underway at Barneys Co-Op - Barneys Co-op called out the contemporary category years before Scoop, Intermix and Cusp were in business. Yet the vision has never been quite fulfilled. That’s now up to Mark Lee, the former Gucci chief executive officer who joined Barneys as ceo eight weeks ago and is about to write a new road map for the Co-op division. “He is starting to make the rounds,” said David New, Barneys executive vice president of creative services for Co-op and its big brother, the Barneys New York luxury chain. “He needs time to sit back and look at everything. There will be a lot of analyzing of what we do and how we do it.” “You’ve got to believe Mark Lee will drill down into this business in a way not seen in a while,” said a ceo of a major supplier to Barneys Co-op. “He will give Co-op a different perspective. They buy a line with their own specific aesthetic and point of view that’s just different from other retailers. It’s very urban and esoteric. It’s worked for a number of years, but sometimes it’s a little too esoteric. Barneys could have a little more feminine perspective.” Locations, the marketing and the merchandise mix — premium denim, established contemporary designers such as Diane von Furstenberg and Theory and emerging designers such as Carven — are under review.< WWD>

Hedgeye Retail’s Take:  Big win for consumers living in a co-op trade area as it appears change is underway.  The Barney’s sub-brand, while once a fashion leader, has been directionless ever since its parent’s financial situation became cloudy.  We wonder if the private label program will be amped up or cut given it’s clear goal was to juice gross margins.

FitFlop Plans Expansion - FitFlop USA LLC is staking a bigger claim in the wellness market with an expanded men’s collection and the debut of its first U.S. headquarters. After launching a men’s sandal collection in 2009, the company is rounding out the offering for spring ’11 with six new styles that include the FF Supertone M sneaker, a sports recovery shoe. Set to retail from $60 to $130, the line will hit retail in January. And to stay better connected to its U.S. customers, the company has just signed a 10-year lease for space at 10 Bank St. in White Plains, N.Y. <WWD>

Hedgeye Retail’s Take:  With toning over a year into its record breaking growth trajectory, it’s hard to know why FitFlop is just now investing heavy into the US market with new styles and a local office.  Recall that over 3 years ago The Limited had a US exclusive on the FitFlop which sold out immediately, but then didn’t sell as well in its second season. 

Sears' Cross-Platform Holiday Gift Guide - Sears Holdings Corp. today began offering for the first time its holiday Wish Book gift guide catalog on Facebook, its iPad app and mobile site. The retailer previously had only offered the Wish Book on Sears.com and in print. Customers who Like Sears on Facebook can access the Wish Book using a separate tab on Sears’ profile page. Within it, consumers can create and share wish lists with their social network, and add items to their Sears.com cart on Facebook. Consumers also can enter sweepstakes available only to customers who Like the company on the social network. Sears has about 220,000 Likes. “Sears is constantly seeking for ways to become more innovative, improve customers’ shopping experiences and ultimately make shopping even more social, especially around the holidays,” a Sears spokesman says. Online at Sears.com/wishbook, customers can browse items in top gift-giving categories such as jewelry, tools and electronics, or view a digital version of the print catalog. <internetretailer>

Hedgeye Retail’s Take:  While the goal is always to bring in younger customers, we wonder how impactful Sears’ social networking efforts will really be given their aging customer base.  How many twenty somethings are out there looking to Sears to fulfill their holiday needs?

 

Integration of Branded Online Communities Grows - According to the second annual “State of Online Branded Communities” study by full-service social engagement firm ComBlu, which examined practices in the online communities of major brands, marketers have adopted a wide variety of best practices and begun to integrate their online community efforts across a variety of social media. In 2009, just under a third of communities studied were integrated with Facebook, Twitter, YouTube or other social sites that the marketer had a presence on. By 2010, the proportion had more than doubled, to 68%.

Comparing a variety of features studied in 2009 to levels of adoption in 2010, the study found online branded communities had increased adoption of best practices across the board. Some of the biggest jumps were in availability of faceted search, inclusion of rich media content, integration with social media and the use of “fun” engagement tools. <emarketer>

Hedgeye Retail’s Take:  Not terribly surprising given the underpinnings of Facebook, Twitter, and YouTube are all rooted in ease of use.  Marketers are simply enjoying the simplicity of these platforms rather than having to build their own.

R3: RL, PVH, FOSL, AEO - R3 11 10 10

Shoe Production in Spain to Grow 3% in 2010 - Footwear exports in Spain grew by 6.7% in terms of volume to 57 million pairs and 4.7% in terms of value to Euro 895 million for the first half of this year, according to figures released by the Federacion de Industrias del Calzado Espanol (FICE). Exports to Portugal rose by 29%, while export growth to Germany, the UK, Italy and France are 15.5%, 13.7%, 9.8% and 5.3% respectively. Meanwhile,  exports to the US and Japan reported the first time of growth in recent years. The industry’s target for the year is to achieve a 3% growth in terms of production. To realize this goal, strategic expansion into emerging markets need to be implemented. For example, exports to Brazil increased by 287%. New markets including Turkey, China and South Africa are also gaining importance. <FashionNetAsia>

Hedgeye Retail’s Take:  Perhaps this is the one bright spot in Spain’s economy?  With inflation on the horizon in the major Asian footwear producing countries, we suspect the smaller, more specialized manufacturing centers to continue to see growth.