R3: TGT, Zappos, OSTK, TBL

R3: REQUIRED RETAIL READING

January 21, 2010

 

   

RESEARCH ANECDOTES

  • With the annual Sundance Film Festival kicking off yesterday, several brands are viewing the event as a prime marketing opportunity given the high-profile attendance. Timberland will be outfitting filmmakers and staff with over 300 new Earthkeeper boots, while COLM’s Sorel is sponsoring a ‘scavenger hunt’ to win access to after hour parties and gear. A less conventional fit is K-Swiss, which will be hosting its second annual ping pong classic featuring directors, producers and actors - suggesting the first was a success.
  • According to retailmenot.com, US consumers saved $32 million over the November/December time frame by using digital coupons.  The coupon aggregator site also notes that digital coupon traffic rose by 25% for the holiday period, with discounts averaging 27%.  Amazon, Victorias Secret, and Kohl’s were top ranked as the most searched retailers for online coupons.
  • According to Outdoor USA Magazine’s 2010 Social Media Award results, there were only four brands that ranked in the Top 10 across each of the popular social networks (Facebook, Twitter, and YouTube) – K-Swiss, Crocs, Columbia/Mountain Hardware, and Vibram Fivefingers. Surprisingly, Patagonia ranked #1 on YouTube with nearly twice as many viewings (3million+) ahead of #2 K-Swiss and its viral Kenny Powers parity.

OUR TAKE ON OVERNIGHT NEWS

 

H&M Partners with Hasbeens - H&M looked to its homeland for its latest collaboration. The Stockholm-based retailer has partnered with footwear brand Swedish Hasbeens, to produce three exclusive styles of wooden-soled clogs. They will be available on April 20.“I love the genuine feeling you get from Hasbeens, from the wood and the leather, and also how they take something traditional and Swedish and make it contemporary and modern,” said Ann-Sofie Johansson, H&M’s head of design, in a statement. “These Hasbeens for H&M fit perfectly with the ’70s bohemian look that’s so important this coming season.”<WWD>

Hedgeye Retail’s Take: Another endorsement for the 70’s which appears to be making its way to the mall in a fairly big way. Recall that Gap is betting on high waisted, flared denim as well. The question remains however if the wooden clogs success can even come close to the last collab with Lanvin. 

Calypso St. Barth Expands at Target - With Calypso St. Barth for Target bowing May 1, the mass retailer is hoping to reprise the success of its Liberty of London for Target launch last spring. The multicategory Calypso collection will feature apparel, accessories and lingerie for women, clothing for girls and babies, and home items such as candles, decorative pillows, dinnerware, glassware and serving pieces. The collection will be available in about 1,200 Target stores and target.com through June 11. <WWD>

Hedgeye Retail’s Take: With some fashionistas wondering if TGT had lost its way with its designer collaborations, we suspect this effort will resonate well with its multi-category approach.  After all who doesn’t aspire to live the French Carribean lifestyle?

Zappos Named No. 6 on ‘Fortune’ List - Zappos.com is making some big moves.  This year, the e-tailer ranked No. 6 on Fortune’s annual “100 Best Companies to Work For” List, released last week.  The company made its debut on the list at No. 23 in 2009, moved up to No. 15 in 2010 and rose nine spots again this year. Zappos also registered the biggest percentage year-over-year job growth on the list, at 37 percent. “While the external recognition of making the list for the third year in a row is great for recruiting purposes, internally the most important thing is for us to take our culture to the next level as we continue to grow,” said Zappos CEO Tony Hsieh in an email sent to employees last Thursday.<WWD>

Hedgeye Retail’s Take: It should come as no surprise that the retailers on the list not only treat their employees well, but commensurately treat their customers well.  High correlation between happy employees and exceptional customer experience.  Other retailers in the top 20: Wegman’s, REI, Nugget Market, and Stew Leonards. 

 

Overstock.com Brands Itself around the Letter O - Overstock.com today began using the domain O.co, directing consumers who type in O.co to the web-only retailer’s e-commerce site, Overstock.com. The company says the new name represents a step in Overstock’s effort to brand itself around the letter O. Overstock, No. 28 in Internet Retailer’s Top 500 Guide, paid $350,000 for the domain name in July on the first day that .co domain names became available from the .CO Internet S.A.S. registry operator.  Organizations and individuals have bought about 600,000 .co domain names. Social network site Twitter, for instance, has bought T.co, while GoDaddy, a web hosting domain registry, now owns X.co. According to the client list on .CO Internet’s web site, Overstock.com appears to be the only e-commerce company using a one-letter .co domain. <InternetRetailer>

Hedgeye Retail’s Take: Long ago the single letter ticker on the NYSE was a true status symbol.  Looks like the times have surely changed.  We now wonder which other brands/business will pay up for the chance to rebrand with a four keystroke URL.

 

Orchard Brands Files Chapter 11 - Orchard Brands on Wednesday said it reached an agreement with the majority of its lenders to restructure the firm in a move that also includes a voluntary Chapter 11 filing in Delaware.  The bankruptcy filing was under the name Appleseed’s Intermediate Holdings. The catalogue operator, which targets men and women in the 55-plus age demographic, is owned by private equity firm Golden Gate Capital.  Golden Gate in October hired Moelis & Co. to find a buyer for the business, which does an estimated annual volume of nearly $1 billion, according to financial sources. Market and financial sources in November said there were few takers, and by December there was speculation that a bankruptcy filing was on the horizon. <WWD>

Hedgeye Retail’s Take: With most missy apparel retailers working on taking their brands to a younger demographic, we wonder if the combination of catalog plus aging demographic finally became too hard to overcome. Of all the catalogers trying to convert to internet, this one is likely one of the more challenging transformations.

Store Expansion High on Agenda for 2011 - Retailers in 2011 will be intent on actively growing their businesses and improving customer insight capabilities, in addition to continuing efforts begun during the economic downturn to stabilize operating costs and focus on financial discipline, according to a report from the National Retail Federation’s research and education arm, the NRF Foundation, and KPMG LLP, the U.S. audit, tax and advisory firm. In surveying 318 retail executives for the ninth annual Retail Horizons: Benchmarks for 2010, Forecasts for 2011 report, 41 percent said that their companies intend to increase domestic store expansions in 2011, up from 25 percent in 2010. Additionally, 25 percent will expand overseas, up from 21 percent a year ago. Signaling an overall consensus that the worst is behind them, 58 percent of retailers surveyed report that cost reduction/cost containment will remain a companywide strategic initiative, down from 81 percent in 2010.

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Hedgeye Retail’s Take: The key callout here is the change in outlook regarding cost containment year-over-year – the more telling indicator of management sentiment. The change on the margin is also consistent with accelerated M&A efforts of late as well.

 

Commercial Complex for Chinese Goods to be Built in Thailand - After China gained a free trade pact with Southeast Asian countries last year, the country now plans to construct a vast commercial building named China City Complex in Bangkok, Thailand to house over 70,000 Chinese traders, with an investment of $1.5 billion. Construction of this complex is planned to start in March 2011 and is scheduled for completion in 18 months. Various China-made items such as ornaments, household products, garments and leather goods will be sold at the complex. Once the complex starts running, the Chinese traders can sell their goods to people from different parts of the world through Thailand, which would help them save the heavy duties imposed on their exports to many western countries.<FashionNetAsia>

Hedgeye Retail’s Take: The combined benefit of lower wage costs and side-stepping export duties could help Chinese manufacturers slow the rate of sourcing shift we’re seeing to some extent to other countries like Vietnam, Indonesia, and Bangladesh – that is until countries revise export duties to include Thailand to counter what is a completely transparent move.