We wouldn’t read too much into the first week’s numbers but they are not good.



The week before and the first few days of Chinese New Year (CNY) are usually slow.  We are hearing that overall market hold percentage may have been low and it certainly was at Wynn and MGM (possibly below 1% at both).  Macau was very crowded on Saturday and Sunday and that is likely to continue.  The strong CNY-related VIP play likely began in earnest on Sunday, which is not included in these numbers.


Our concern is that some analysts/investors may be expecting close to a HK$20bn month while we think HK$17-18bn is more likely even with strong CNY volumes this week.  MPEL continues to have the most upside relative to expectations, in our opinion.  Wynn’s market share should bounce back nicely.  We are hearing their numbers were extremely strong the last two days.



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R3: SKX, Barneys, TLB, Jobs


February 7, 2010





  • In a continued effort to draw attract a younger customer, Talbot’s latest Spring marketing campaign features actress Julianne Moore.  The print images are a complete upgrade for the brand from an artistic perspective, however the translation into a return on sales still remains unknown.
  • Call it luck or clever marketing strategy, but last night’s Superbowl ad for Skecher’s Shape-Ups featuring Kim Kardashian came at a critical point in the game.  Had the game been a blowout, millions of viewers would have likely moved on with just two minutes remaining.  However, with the Steelers getting one last opportunity the timing for Skechers couldn’t have been better. 
  • An interesting timing of events with the arrival of new Barney’s CEO Mark Lee and the likely IPO of Prada sometime in the near future.   On Friday, Lee announced that the iconic luxury retailer will no longer carry Prada handbags or women’s apparel.  While there is some confusion surrounding the rationale behind this move, there is speculation that Prada wished to convert those business into leased departments which is against Barney’s policy. 



Retailers Add Jobs -  Coming off of a solid holiday season, retailers boosted their payrolls in January with some of the strongest employment gains in months, as the overall unemployment rate fell sharply to the lowest level in nearly two years, the Labor Department said Friday. Clothing and accessories stores added 14,600 jobs to employ 1.422 million last month. It was the biggest gain in the sector since December 2006, when clothing and accessories stores added 16,000 jobs. <WWD>

Hedgeye Retail’s Take:   While customer service wasn’t mentioned as a factor in January’s sales upside, it certainly would be a reason why certain retailers would feel more confident on the hiring front.


Mark Lee Talks Barneys Plans - Mark Lee’s vision for Barneys New York is starting to take focus. At a breakfast meeting at Fred’s with several reporters Friday, Barneys’ new chief executive officer hinted at some changes to come at the luxury specialty retailer. Among the new developments:  A black-and-white spring image campaign that was photographed backstage at fashion shows in New York, London, Milan and Paris. Cinematic images will appear in national newspapers, magazines and online, and will be displayed gallerylike throughout the store and windows and Renovation of the Madison Avenue flagship’s main floor and men’s Co-op department — two major projects that will be undertaken this year. <WWD>

Hedgeye Retail’s Take:  Aside from marketing tweaks, expect Barney’s to up its ante on the exclusive, ultra-luxury front.  The store aims to be differentiated once again, after losing its premier fashion status over the past several years.


Jones New York Introduces Legwear - The Jones Group will be introducing its first collection of legwear and socks bearing the Jones New York label for fall. A licensing agreement was signed last fall with Leg Apparel, a division of Aimee Lynn Inc., to manufacture and distribute the legwear line. The legwear will be launched simultaneously with a handbag and a footwear collection for fall by Jones New York, which is being produced in-house, said Mary Bell, president of licensing at The Jones Group. <WWD>

Hedgeye Retail’s Take:   Definitely not a game changer or needle mover for the brand that continues to struggle with its identity (and market share).


Wal-Mart, Humbled King of Retail, Plots Rebound - The battle for shoppers is playing out in this New York suburb: Wal-Mart versus everyone else. Dollar stores beckon, their small size ideal for quick shopping. Target offers 5 percent off if you pay with its store-branded card. Costco tempts with high-end, brand-name food and designer clothes at competitive prices. Bernadette Clark used to visit Wal-Mart here twice a week. Now it's twice a month. She got fed up last year when Wal-Mart stopped stocking some of her favorite brands and she couldn't count on low prices. "It gave me the opportunity to look elsewhere," she says. "I shop around more." <TheWallStreetJournal>

Hedgeye Retail’s Take:  Not a single bit of new info here except that the PR machine remains alive and well.  The message continues to be that merchandising and pricing changes are underway, yet we still wonder what impact all this “chatter” has on actual sales results.


Harry Winston Remodels Store in Las Vegas - Harry Winston is putting a friendlier face on its retail. The grand opening Thursday of the fine jewelry brand’s Las Vegas store within the Crystals at CityCenter marked the official introduction of a revamped store design instituted to convey Harry Winston’s accessibility by simultaneously being more open and more intimate than past stores. The new look was unveiled as Harry Winston is embarking on an aggressive expansion plan to grow its existing retail network of 20 units to 50 within the next five years, including seven stores this year. <WWD>

Hedgeye Retail’s Take:   No longer is the exclusive, members-only club feel going to work if the brand is to expand its target audience.  Bottom line, Harry Winston was/is an intimidating place to shop for anyone other than a very, very small percentage of high net worth inidivduals.


January e-commerce spending rose 12% - Online spending in January rose 12% year over year, marking the third consecutive month of double-digit growth, according to an estimate released today by MasterCard Advisors, the consulting arm of MasterCard. “A combination of rising consumer demand and strong pricing continued to drive retail sales in January,” says Michael McNamara, vice president, research and analysis for MasterCard Advisors SpendingPulse. “Although less robust, the trends we observed were similar to those recorded in the fourth quarter of 2010.” <InternetRetailer>

Hedgeye Retail’s Take: Still one of the fastest growing channels in retail. 


Patagonia Opens UK Flagship Store - Patgonia announced the opening of its first UK flagship store in Covent Garden. The 2,500 square foot store will be a partner store in collaboration with Outside, who also opened Patagonia's Hathersage store in the Peak District. The Covent Garden space was selected in keeping with the company's retail brief, to use historic sites and to preserve the integrity of the building. Patagonia and Outside intend to work collaboratively with the architects to ensure sensitivity when working with the historical aspects of this unique space, which they hope will in turn be enhanced by the bespoke fixtures and fittings which are to be sourced. Patagonia's sales for last fiscal year end of April 2010 were $333 million. <SportsOneSource>

Hedgeye Retail’s Take: International growth at one of The North Face’s ‘better’ competitors is worth noting, but with the UK store marking Patagonia’s sixth store in Europe, the brand is hardly on the heels of VF, which is taking a much more targeted and aggressive approach to penetrating Europe.


Best Practices for Mobile Retail Strategy - Mobile devices accompany consumers everywhere throughout a busy day. Through mobile initiatives, retailers have unique opportunities to engage with consumers as they move through each purchase phase—whether they’re in a store, in transit, at work or at home. Data from InsightExpress showed that during the holiday 2010 season, smartphone owners used their devices at different stages of the purchase funnel: to receive sale alerts (awareness), look for better prices and product reviews (consideration) and redeem coupons (conversion). This gives retailers many opportunities to connect with consumers and encourage purchase and loyalty. <Emarketer>

Hedgeye Retail’s Take: Perhaps the most notable callout here is how much progress is yet to come with over 60% of retailers looking to enhance their current mobile platforms.


R3: SKX, Barneys, TLB, Jobs - r3 2 7 11


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