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R3: REQUIRED RETAIL READING

February 11, 2010

 

 

 

RESEARCH ANECDOTES

  • In an effort to satiate demand driven by Fashion Week, Perry Ellis will actually put 10 looks from its Fall 2011 collection on sale via Facebook immediately following the brands show.   You must already be a “fan” to purchase the products, however the sale will open to the public for a limited time beginning on Monday.  The product will be delivered in two months.  If successful, we suspect this may become a new way for brands to test demand well in advance of Fall booking season. 
  • A recent study by Horizon Media reveals that bringing sponsorships onto professional sports jerseys in the US could generate more than $370 million in advertising value.  Not surprisingly he NFL is estimated to represent two-thirds of the untapped potential.  Dallas, New England, and the New York Giants are each estimated to have about $14 million in uniform advertising potential.
  • In an effort to navigate inventory/order flow in the face of greater cost uncertainty over the next 12-months, premium denim brand Joe’s Jeans commented that they are not accelerating the timing of inventory receipts, but instead working with retailers to commit to orders further ahead of time helping to increase visibility. Unlike other premium brands, the company also noted that they are looking to re-engineer their jeans (i.e. shift to lower quality fabrics) to offset cost increases.

OUR TAKE ON OVERNIGHT NEWS 

 

Puma  and Undefeated to Release Clyde Collection - This spring, Puma’s Clyde is going Undefeated. German athletic brand Puma is expected to announce Friday that it has partnered with seminal Los Angeles sneaker shop Undefeated for a collection of the brand’s iconic Clyde basketball style.  The first shoes in the collaboration, unisex styles retailing for $110, were designed by Undefeated cofounder Eddie Cruz and will deliver to Undefeated and other top-tier sneaker shops on April 10. A second delivery of $65 styles to the same channel will drop on June 10. Further releases are planned throughout 2011 and beyond.  <WWD>

Hedgeye Retail’s Take:  While collaborations are nothing new in the world of sneakerheads, the focus on basketball from Puma is certainly noteworthy.  While not a strongpoint of Puma’s heritage, we suspect the overall hoops resurgence is influencing this grassroots effort.

 

American Eagle Speculation about Retail Takeover - American Eagle Outfitters Inc. surged the most in almost two years in New York trading on speculation the Pittsburgh-based teen-clothing retailer may be a takeover target. The shares rose $1.34, or 9.1 percent, to $16.03 at 4:01 p.m. in New York Stock Exchange composite trading for the largest gain since April 2009. “It’s the takeover rumors starting up again,” said Brian Sozzi an analyst for Wall Street Strategies Inc. in New York. A deal would make sense for private equity because American Eagle has “a good brand and generates lots of cash,” he said. The clothier, led by Chief Executive Officer James O’Donnell, faces increasing competition from teen retailers like Abercrombie & Fitch Co. and Aeropostale Inc., both of which reported gains in same-store sales last month.  <Bloomberg>

Hedgeye Retail’s Take:   If every “good brand with lots of cash” was for sale, then we’d be certainly be more bullish on retail.  We point out that at various times over the past four years, AEO has been rumored to be for sale.

 

Lindsay Lohan Looses Shelf Space  - While Lindsay Lohan’s legal woes are taking center stage once again, the actress’ apparel and accessories brand, 6126, has quietly receded from the shelves of department and specialty stores, according to checks by WWD. Initially a leggings brand, 6126 made a splashy debut in 2008 and 2009 at upscale stores such as Nordstrom, Macy’s, Bloomingdale’s, Neiman Marcus and Limited Brands Inc.’s Henri Bendel, but representatives from those stores said this week they no longer carry the line. <WWD>

Hedgeye Retail’s Take:  With Lohan in the headlines for all the wrong reasons, this hardly comes as a surprise.  Let this serve as a reminder that celebrity licensed product lines are not without risks.  Lohan’s latest theft snafu may actually land her in jail for a prolonged period of time.  Jumpsuit endorsement perhaps?

 

Stride Rite Lands Marvel License -  Stride Rite has added another big license to its stable. The brand, a division of Topeka, Kan.-based Collective Brands Inc., has signed a multi-year licensing agreement with Marvel Entertainment to create a collection of children's shoes inspired by Marvel's cast of iconic superhero characters, including Spider-Man, Iron Man and Captain America. The collection, available in toddler and youth sizes, will include athletic styles, sport shoes and casual sandals. <WWD>

Hedgeye Retail’s Take:   Good timing with many of the Marvel characters making splashes on the big screen.  We wonder if Captain America shoes will be ready for the July release.

 

Retailers Switch to iPads from Conventional Kiosks - City Sports and Things Remembered have unveiled a new system from mobile retail software provider Global Bay Mobile Technologies that turns off-the-shelf iPads into kiosks to enhance the in-store experience for shoppers. The iPads are securely mounted to kiosk-like stands throughout the stores. The bottom button on the iPad, which takes users to the iPad home screen, is covered so shoppers can only use the app running on the screen, called iPad Kiosk. The app, linked to a retailer’s information systems via Wi-Fi, can be customized to present any information a retailer selects. <InternetRetailer>

Hedgeye Retail’s Take:    With no moving parts and a relatively low cost, the growth of the Ipad in an enterprise setting is likely to continue.  Check out Square (https://squareup.com/)  which actually turns your Ipad into a cash register. 

Asia Fuels Sales Growth at Prada - Prada Group closed the year with a bang, with sales exceeding 2 billion euros, lifted by gains across all geographical markets. In the fiscal year ended Jan. 31, the Italian luxury house reported revenues of 2.04 billion euros, or $2.69 billion, up 31 percent compared with the year before. In particular, sales in Asia rose 48 percent. At the end of last month, Prada said that it planned to go ahead with an initial public offering on the Hong Kong Stock Exchange.  “These results confirm that the retail network expansion is a winning strategy and exceeding the threshold of 2 billion [euros in] revenues is a target which now allows us to set further challenging goals,” said Patrizio Bertelli, chief executive officer of the company.  <WWD>

Hedgeye Retail’s Take: With less than 18 stores domestically and the company’s plans for an IPO forthcoming, expect to see considerable store expansion domestically this year.

E-Commerce up in 2010 - Total U.S. e-commerce spending reached $227.6 billion in 2010, up 9% versus the previous year, according to the comScore 2010 U.S. Digital Year in Review report released this week. Travel e-commerce spending grew 6% to $85.2 billion, while retail (non-travel) e-commerce spending jumped 10% to $142.5 billion for the year. The annual report recaps key trends in the U.S. digital media landscape, including e-commerce, social networking, online video, search, online advertising and mobile, with an emphasis on how digital marketers can capitalize on these trends in 2011. “2010 was a very positive year for the digital media industry, highlighted by a strong rebound in e-commerce spending , significant innovation and increased demand for online advertising, and an explosion in digital content consumption across multiple platforms,” said comScore chairman Gian Fulgoni. <SportsOneSource>

Hedgeye Retail’s Take: e-commerce outperformance is not new news, but the category is likely to be off to a solid start again early here in 2011 with consumers intermittently housebound in January. At this point, the callout is those companies not participating – HIBB is one of the few retailers that comes to mind that still lack a platform.