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Takeaway: Not particularly a high-quality 'feel good' call, but everything has a price. We'll take the other side of today's JCP sell-off.

Editor's note: What follows below is a brief, complimentary excerpt from a report just issued by Hedgeye Retail Sector Head Brian McGough. It comes on the heels of J.C. Penney's shares' precipitous plunge to 13-year lows. To learn more about how to subscribe to McGough's  "Hedgeye Retail Pro" research please click here.  



Bottom Line 

We’re buyers of J.C. Penney (JCP) on today’s sell-off. Let’s be clear about what kind of call this is, because it’s definitely not for the faint of heart.


We still know nothing about the long-term strategy or upcoming management transition, and are still living with the balance sheet baggage from the past two years.


This is a company with no square footage growth, where the average consumer could care less if it exists or not. (Sounds great, huh?).  But everything has a price.  And at $10, way too much credence is being given to the ‘terminal’ call.


We can say a lot of bad things about JCP, but we definitely don’t think it is terminal and our recent work suggests that much of the business lost is definitely recoverable.


As it relates to liquidity, we think that the only reason why the company would act now is to ensure that it has the best pool of CEO candidates possible (questions around liquidity would otherwise weed out the best candidates).

JCP: We'll Take the Other Side of Today's Sell-Off

Takeaway: Not particularly a high-quality 'feel good' call, but everything has a price. We'll take the other side of today's JCP sell-off.

Conclusion: We’re buyers of JCP on today’s sell-off. Let’s be clear about what kind of call this is, because it’s definitely not for the faint of heart. We still know nothing about the long-term strategy or upcoming management transition, and are still living with the balance sheet baggage from the past two years. This is a company with no square footage growth, where the average consumer could care less if it exists or not. (Sounds great, huh?).  But everything has a price.  And at $10, way too much credence is being given to the ‘terminal’ call. We can say a lot of bad things about JCP, but we definitely don’t think it is terminal and our recent work suggests that much of the business lost is definitely recoverable. As it relates to liquidity, we think that the only reason why the company would act now is to ensure that it has the best pool of CEO candidates possible (questions around liquidity would otherwise weed out the best candidates).


1) Some Consumer Insights From Our Recent Survey Work

  • Our recent survey work of JCP’s customers suggests that they left (or are spending less) for reasons that are fixable. Such as a) poor pricing, and b) lack of sales/promotions…

JCP: We'll Take the Other Side of Today's Sell-Off - chart1

  • Consumers noted, on the whole, that they will return to JCP if these items are fixed.

JCP: We'll Take the Other Side of Today's Sell-Off - chart2

  • Another big negative… elimination of exclusive brands like Arizona, St. John’s Bay, etc…

JCP: We'll Take the Other Side of Today's Sell-Off - chart3


  • Consumers went to KSS and M more than any other retailers. We think KSS (which got about 19% of JCP’s business lost) will be particularly easy to target for customer re-acquisition. We’re talking about $800mm.

JCP: We'll Take the Other Side of Today's Sell-Off - chart4


2) Gross Margin: Don’t underestimate the GM opportunity here. Johnson took away $2.5bn in revenue at 48% GM%, and substituted it it with under $1bn of revenue at 33% GM%. That’s a 500bp opportunity right there.


JCP Historical Gross Margin Change

JCP: We'll Take the Other Side of Today's Sell-Off - chart5

JCP: We'll Take the Other Side of Today's Sell-Off - chart6


3) Liquidity: Our analysis (below) suggests that JCP’s liquidity will definitely be tight – starting in about 6 quarters – but will not crimp its ability to self-finance its recovery. The company has in excess of $1bn of sources to monetize before tapping capital markets (which is not included in the analysis below).   Here’s a catch: They’re searching for a CEO. Having a cash-filled balance sheet broadens the pool of candidates. As such, they might tap markets simply to get the right talent on Board.
JCP: We'll Take the Other Side of Today's Sell-Off - chart7


4) Re today’s price movement: Five things combined to create the massive sell-off you see today.

  • A research firm came out today saying JCP 3Q sales are weak and that the company won’t comp in 4Q
  • JCP in court today for MSO/M case – something that absolutely no longer matters.
  • CEO Ullman is having a meeting with a broker today
  • GS Hi Yield analyst out last night saying that equity is worthless
  • Zerohedge glomming on to the fact that GS profited from the JCP secured term loan that it issued (and currently holds) in April, and now it is trying to make money on the other end while it pushes for JCP to file.


McCullough: Bernanke Channels Nero

Takeaway: This is the first 2013 US stock market “correction” that I will not be buying because of Ben Bernanke.

Editor's note: Forbes published an opinion piece written by Hedgeye CEO Keith McCullough earlier this morning. The following is an excerpt. Please click on the link at the conclusion to continue reading.


McCullough: Bernanke Channels Nero - im1


Central planners have been clipping coins and devaluing the The People’s hard-earned currency for at least two thousand years.  The Roman Emperor Nero of course devalued the Roman currency for the first time in the Empire’s history.


...If you don’t understand the history of un-elected politicians devaluing currencies, you have some reading to do. Most people who aren’t paid not to “get” it understand this now. Self-education is the best long-term path to avoid becoming a lemming.


Look, I’m not that smart. Most people who have seen my SAT scores would agree. But I work hard and I recognize that Mr. Market is a very smart cookie. What I tend to get on a lag, is what Mr. Market is telling me to get. Unlike our Fed Chief, I don’t wake up every morning trying to bend economic gravity.


Ben Bernanke believes he can “smooth” gravity, economic cycles, etc. He’s basically telling the entire bond, currency, and stock markets that they are all wrong. So let’s stop, rewind the tapes and go to the score – what have markets done since Bernanke decided not to taper?


Click here to continue reading on Forbes.


McCullough: Bernanke Channels Nero - im2

(Image courtesy of the Bureau of Labor Statistics)


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.46%
  • SHORT SIGNALS 78.35%


Takeaway: Buy the book. A must read.

I’ve had many of you ask me for my thoughts on Nassim Taleb’s latest risk management book, Antifragile. So, in the spirit of the main criticism I’d give the book (it’s repetitive), here are some brief notes (< 1000 words = Top 50 highlights):


Summary Thoughts

  1. He doesn’t like academic/unaccountable government policy. Neither do I.
  2. He likes the recent work of Dan Kahnemann (Thinking, Fast and Slow). So do I.
  3. He’s transitioning from market practitioner to philosopher. I wouldn’t do that.

Bottom line: Buy the book. A must read as we continue to narrow the gap between Chaos Theory and Behavioral Finance.




Content Highlights


  1. “I’d rather be dumb and antifragile than extremely smart and fragile” (pg 4) Wall St “smart” is changing
  2. “anything that has more upside than downside from random events is antifragile; the reverse is fragile (pg 5)
  3. “This is the tragedy of modernity… those trying to help are often hurting us the most (pg 5) #agreed
  4. I.A.N.D (International Association of Name Droppers)” (pg 6) #funny
  5. “academics with too much power and no real downside and/or accountability” (pg 6) #yep
  6. “Less is more and usually more effective”, cites Steve Jobs  (pg 11); good advice, #practice it
  7. “only practitioners (or people who do things) tend to spontaneously get to the point” (pg 13)
  8. “Table 1: The Central Triad (3 Types of Exposures” (pgs 24-27) very #thoughtful/concise on Behavioral Econ
  9. “We are all… similarly handicapped, unable to recognize the same idea…” (pg 39) good pt on #context #bias
  10. “Abundance is harder for us to handle than scarcity” (pg 42)
  11. Equilibrium, Not Again” (pg 60) solid complexity theory (Stuart Kaufman) reference vs #Keynesian
  12. “Leopards… are not instructed by personal trainers on the “proper form” to lift a deer up a tree” (pg 73) #true
  13. “you learn from the errors of others…” (pg 73),  #important lessons, especially on Wall St
  14. National Entrepreneur Day” (pg 79) #Obama, please read
  15. “what is made to fly will not do well on the ground… volatility comes from volare, “to fly” in Latin” (pg 81)
  16. “Nature loves small errors… humans don’t.” (pg 85) #evolve
  17. “those experiencing a brand of variations called chaos can be stabilized by adding randomness to them” (pg 103)
  18. “For a theory is a very dangerous thing to have… Theories are superfragile.” (pg 116) #awesome quotes
  19. “Men feel good less intensely than bad.” (pg 155) good quote by Livy in the context of #Seneca’s thoughts
  20. Seneca’s Barbell” (pg 161) #important pg to read related to your #Cash position and #Drawdown risk
  21. “An agent does not move except out of intention for an end.” (pg 169) #quote from St Thomas Aquina
  22. Convex Tinkering” (pg 182) makes an #excellent risk mgt pt on asymmetry with a picture
  23. “Life is long Gamma” (pg 184) would love to hear the anti-free market #answer to that
  24. “Risk taking ain’t gambling, and optionality ain’t lottery tickets” (pg 185) this ain’t Kansas, and I ain’t Toto
  25. “Few want to jeopardize their jobs and reputation for the sake of change” (pg 192) #truth
  26. “Evolution does not rely on narratives, humans do” (pg 207) #money quote
  27. Table 4: “The difference between teleological and optionality” (pg 214) good thinkers framework
  28. Chapter 15 = “History Written by the Losers” #rant
  29. “The difference between humans and animals lies in the ability to collaborate” (pg 233), bingo #collaboratio
  30. “Nokia … began as a paper mill” (pg 235), #re-learn, find a way to win
  31. “Trial and error is freedom.” (pg 246) #RiskMgt101
  32. “You are taking the joy of ignorance out of out of the things we don’t understand” (pg 253) Fat Tony to Socrates
  33. “What is not intelligible to me is not necessarily unintelligent” (pg 256) #Nietzsche
  34. “It would be like prostitutes listening to technical commentary by nuns” (pg 264) Bernanke, comments?
  35. “Smile! A better way to understand convexity and concavity” (pg 272) #pics summarize hundreds of pages
  36. “Squeezes are exacerbated by size” (pg 279) think #HedgeFundBubble, Short Interest, etc.
  37. “If you have favorable asymmetries, or positive convexity… in the long run you will do reasonably well” (pg 300)
  38. “Innovation is saying no to 1,000 things.” (pg 305) quotes Steve #Jobs again
  39. “we are moving into the far more uneven distribution of 99/1 across many things that used to be 80/20” (pg 306)
  40. “absence of literary culture is actually a marker of future blindness” (pg 314) on some #techies vs the classics
  41. Medicine, Convexity, and Opacity” (pg 337), you can skip this chapter unless you like to rip on doctors
  42. “mention of the fragilista journalists Friedman or Krugman can lead to explosive bouts of anger” (pg 362) #lol
  43. Chapter 23 = “Skin In The Game” (pg 375) 1st three pages and Table 7 of this chapter #excellent
  44. “a person is only as respectable … as the downside he is willing to face for the sake of others” (pg 376) #skin
  45. “you can’t feel insulted by a dog” (pg 380) #woof
  46. “in traditional societies even those who fail have a higher status than those who are not exposed” (pg 383)
  47. “Isn’t this unethical?” (pg 413) crushes Princeton’s Alan #Blinder for his conflicts of interest as an academic
  48. “Everything gains or losses from volatility. Fragility is what loses from volatility and uncertainty” (pg 421) #conclusion
  49. “Prometheus is long disorder; Epimetheus is short disorder” (pg 422) #conclusion
  50. “living things are long volatility. The best way to verify that you are alive is by checking if you like variations” (pg 423)


Clients often remind us that we’ve had a great call on MCD this year, but also prod us not to get carried away with our bearish bias.  Admittedly, this is not an easy feat – but, as the facts change, so will our call.  Our intention is always to remain flexible in our coverage.

That being said, our bearish bias has not changed.  Below we highlight four recent events and their potential implications.

  1. The stock outperformed the S&P 500 over the past month
  2. The current Mighty Wings promotion
  3. Changes in the Eurozone
  4. Personnel changes in the U.S.

Stock Price Performance – MCD is up +2.8% over the past month, outperforming the S&P 500 and its quick-service peer group by 80 bps and 200 bps, respectively.  Given that the stock had underperformed the S&P 500 by -20.9% YTD, we knew the slightest whiff of good news would push the stock higher.  So where is the good news coming from?


Mighty Wings – MCD hasn’t generated as much buzz around a limited-time offer (LTO) since the McRib promotion.  But, at the end of the day, it is just a LTO.  The recent buzz might create a month or so of stronger sales trends, but we don’t view this promotion as a game changer for the company.  Selling chicken wings may temporarily boost sales, but, in the long run, we fear that it will end up inflicting more harm than good.  Asking the currently disgruntled franchisee community to prepare yet another product, with a slower than normal preparation time, will only add to the service issues the company is already experiencing.  In our view, this is likely to lead to further deterioration of the MCD brand.





Changes in the Eurozone – MCD has been trading better since the release of August comps on September 10th.  Global trends in August were stronger due in large part to better than expected results in Europe.  The company reported Europe same-store sales growth of +3.3%, on top of +3.1% growth a year ago, as the UK, Russia, and France were strong.  Several of the MACRO indicators we monitor in Europe continue to show improvement in the region, specifically in Germany, MCD’s most important European region.  Today, the forward-looking German Consumer Confidence Indicator from the GfK Survey rose to 7.1 for October, surpassing consensus expectations.  GfK notes that, “despite a fall in income expectations, German consumers are almost euphoric when it comes to their propensity to consume.”  Investors also got some good news from Italy, another market that has given MCD considerable headaches in the past.  Today, Italy’s Consumer Confidence Index jumped to 101.1, its highest level since June 2011.








MCD: SIGNS OF LIFE? MAYBE (MAYBE NOT) - germany income expect



Personnel Changes in the U.S. – Yesterday we learned that MCD’s Neil Golden plans to retire early next year.  Given the importance of MCD’s marketing message, it is clear that the company does not have its act together, particularly in its most important region, the U.S.  Despite the recent limited-time offer of Mighty Wings, McDonald’s continues to struggle in the region.




The stock is having a strong month and Europe is looking stronger, on the margin, for the company.  However, the U.S. continues to struggle and we believe it will be a while before the company returns to high-single digit EPS growth.






Howard Penney

Managing Director


What’s New Today in Retail (9/25)

Takeaway: Athletic footwear data looking weak. FNP deal pothole. Alibaba comes to NYSE? JCP/Disney. Adidas, Sears Canada, M, AMZN, CROX, TGT



BBBY - Earning's Call: Wednesday 9/25/13 5:00pm 

HMB - Earning's Call: Thursday 9/26/13 2:00am




NPD Footwear Data

Takeaway: The athletic footwear industry continues to put up lackluster weekly retail POS results. The latest week was -1.4% per NPD – not good. The only positive is that average selling price is still +3.4%, which is good to see, as ASP degradation is the first sign of a protracted (and unmanageable) slide in industry sales.  Nike’s print tomorrow should offer up additional color on the space.   


What’s New Today in Retail (9/25) - chart5 9 25

What’s New Today in Retail (9/25) - chart4 9 25


U.K. Retail Sales Rise at Fastest Pace in 15 Months, CBI Says



  • "U.K. retail sales rose at the fastest pace in 15 months in September, boosted by grocery and furniture stores, according to an index by the Confederation of British Industry."
  • "A gauge of annual sales growth increased to 34, the highest since June 2012, from 27 in August, the London-based lobby said today. Economists had forecast a drop to 23, according to the median of nine estimates in a Bloomberg News survey. Retailers expect sales to maintain their momentum next month."
  • "A gauge of the volume of orders placed with suppliers climbed to 14 in September from 10 in August and a measure of sales volumes for the time of year rose to 12 from 10. A three-month moving average of sales jumped to 26 from 15."
  • "The CBI’s survey of 61 retailers was conducted between Aug. 28 and Sept. 11."


Takeaway: This synchs with comments from Foot Locker and Sports Direct that the UK is clearly getting better on the margin.



FNP, JOEZ - M&A Deals Stalling Near Finish Line




  • "The frontrunners to acquire Lucky and Juicy have both dropped out... The firm, which declined to comment Tuesday, is still working to sell the brands."
  • "In the case of Lucky, the weakening outlook at the business appears to have been a key factor in the last-minute change in M&A dance partners. Fifth & Pacific had been in exclusive talks with private equity firm Advent International for Lucky, but the deal fell apart 'on the one-yard line' late last month, according to one of several financial sources, who confirmed that the deal fell through."
  • "Even as Advent stepped out, one source said, at least three other players have moved to the fore and are vying for Lucky, although their identities could not be confirmed."
  • "At Juicy, sources said that IDG Capital dropped out of the bidding last week. Talks intensified between Fifth & Pacific and IDG in August, and Authentic Brands Group was seen as a backup bidder. Now it looks as if Authentic could leap to the forefront. Calls to Authentic for comment were not returned."


FNP Takeaway: It goes without saying that this is a bump in the road for FNP.  But as it relates to the sale of Lucky and Juicy Coture – whether they go for $600mm or $800mm is fairly meaningless in the grand scheme of things for this company. Will it move the stock by a buck or two up or down? Yes. Around $0.85 per share for every $100mm to be precise. But either way the proceeds will be enough to completely eliminate FNP’s debt burden 2x over. Then you’re left with a debt free Kate Spade, which is a brand that is nearing $1bn, and headed to $3bn-$4bn, with all the capital it needs to grow.  Still a very big idea.  A sell-off in the wake of the M&A news is all we’d need to once again get much louder on the name.



  • "Meanwhile, the Hudson deal has been delayed by a month as Joe’s worked to secure financing."
  • "The deal, in which publicly held Joe’s would pay $97.6 million in cash and convertible notes for the assets of privately held Hudson Clothing Holdings Inc., was unveiled on July 15 and originally was expected to close by Aug. 31. When details couldn’t be hammered out in time for a Sept. 15 deadline, a waiver was granted extending the date to Sept. 30."
    "CIT Group, which has provided day-to-day financing to both companies, remains committed to the deal, according to market and financial sources. A second lender, believed to be Goldman Sachs, has withdrawn, with the transaction moving toward completion with the participation of Garrison Investment Group in Goldman’s place."


Alibaba - Alibaba Said to Plan U.S. IPO After Hong Kong Talks Break Down



  • "Alibaba Group Holding Ltd. is moving toward an initial public offering in the U.S. after talks for a Hong Kong listing broke down following management’s proposal to keep control in a share sale, according to two people familiar with the matter."
  • "China’s largest e-commerce company is seeking U.S. law firms to help with an IPO and hasn’t hired banks yet, said one of the people, who asked not to be identified because the process is private. Alibaba is likely to choose the New York Stock Exchange, another person said."
  • "Investment banks have valued Alibaba at as much as $120 billion, which would make it the third-biggest Internet company behind Google Inc. and Amazon.com Inc. based on market capitalization."

Takeaway: Whether you care about the on-line space or not, you need to pay attention to Alibaba. It is bigger than Amazon and eBay combined, and absolutely dominates Chinese e-commerce. Not only is it dominant, but it also does an incredible job with brand presentation. Certain US Premium and Luxury brands that have yet to go into China are evaluating having Alibaba host its site instead of building fulfillment operations organically. They’d never in a million years consider that with Amazon.  Let us know if you want to talk in greater detail about this one.  


JCP - Tragic JC Penney Story Gets a Touch of Disney Magic



  • Disney’s "store within a store" will begin in JCP stores around the country this week.
  • "The Disney mini-stores are a legacy of former JC Penney CEO Ron Johnson's vision to transform the retailer into a collection of shops maintained by different vendors. This is no ordinary licensing deal with generic Disney merchandise that can be found at any retailer. The concept was originally conceived to give Disney 750 to 1,000 square feet of space crammed with exclusive merchandise."


Takeaway: Out of any JCP shop-in-shop, this is potentially the most productive space as it spans apparel, toys and collectibles. Also, let’s not forget the fact that Disney now owns the Star Wars license.  

What’s New Today in Retail (9/25) - chart6 9 25

What’s New Today in Retail (9/25) - chart7 9 25


ADS - adidas D Rose 4 – Officially Unveiled



  • Adidas unveiled its newest iteration of the D Rose collection on Sunday at the United Center in Chicago. The "D Rose 4" will retail for $140 and will hit stores 10/10/2013.


What’s New Today in Retail (9/25) - chart1 9 25


M - Macy's Ship-From-Store Scales Up To 20,000-Plus Daily Orders



  • "Macy's has nearly doubled the size of its ship-from-store program over the summer and may now be handling tens of thousands of orders per day, according to the Cincinnati Enquirer."
  • "The department store chain has added fulfillment departments to 200 stores this summer, increasing the total to 500. One store in the Cincinnati area, which has been part of the ship-from-store program since 2012, on a typical day ships 50 to 60 orders to Macy's customers who ordered items that they wanted to buy in another Macy's store that was out of stock. If that's typical, Macy's could be shipping between 25,000 and 30,000 orders every day from the 500 stores. (Macy's hasn't given out actual numbers for the ship-from-store program.)"
  • "That's a typical day. During one of the chain's one-day sales, the volume is typically 75 to 100 orders. During the holiday season after Thanksgiving, the store handles 300 to 400 orders a day."


VNCE - Vince IPO Planned for Up to $200 Million



  • "The company filed a confidential filing in July with the Securities and Exchange Commission that was made public late Tuesday. The filing, which said shares will trade under the symbol 'VNCE', did not state how many shares will be issued nor at what price."
  • "The filing was made by Apparel Holding Corp., which holds the Vince business and the nonVince businesses under the Kellwood umbrella. Following the IPO, Vince will become Vince Holding Corp. The non Vince businesses will be under the Kellwood Holding Corp umbrella."
  • "For the six months ended Aug. 3, Vince posted net income of $2.4 million on net sales of $114.7 million."
  • Vince is a contemporary apparel brand for men and women.


SCC - Change at top of Sears has landlords eyeing leases



  • "Sears Canada Inc.’s move to replace its chief executive officer with a former turnaround specialist has landlords weighing the prospect of buying back more of the retailer’s coveted leases to make way for new rivals."
  • "Sears confirmed on Tuesday The Globe and Mail’s report that CEO Calvin McDonald was leaving 'to pursue an opportunity with a leading international company,' without naming it. He is being replaced by chief operating officer Douglas Campbell."
  • "Landlords have been in talks with Sears about the possibility of buying back prized leases from the struggling retailer, industry sources said. Already, Sears has sold a handful of its leases, raising almost $400-million. The landlords are hankering to regain control of the properties because of Sears’ weak results, the stores’ prominent mall locations, their low rents, and the scarcity of prime retail space."


AMZN - Amazon Refreshes Kindle Line With Fire HDX



  • "[AMZN]...is staying the course with a new line of Kindle Fire tablet computers that undercuts competitors like Apple Inc.'s iPad on price, and appears designed largely to drum up sales for other services such as digital music and e-books."
  • "The company plans to unveil on Wednesday two new versions of its tablets—the Kindle Fire HDX—available with 7-inch or 8.9-inch screens."
  • "The Kindle Fire HDX starts at $229 for the 7-inch version and $379 for the 8.9-inch version, and models with 4G wireless connectivity are $100 more each"


TIF - Frederic Cumenal Appointed President of Tiffany



  • "[TIF] has appointed Frederic Cumenal to the position of President of Tiffany & Co. and also appointed him to a newly-created seat on the Company's Board."
  • "In his new role, Mr. Cumenal, 54, will retain his regional responsibilities and will assume responsibility for the Design, Merchandising and Marketing functions. Mr. Cumenal will continue to report directly to Mr. Kowalski…"
  • Frederic Cumenal joined Tiffany in March 2011 from LVMH where he was the President and CEO of Moet and Chandon.

Takeaway: LVMH is a hot-bed for talent sourcing. In January 2012 Daniel Lalonde left LVMH to become the head of International for Ralph Lauren.  


CROX, VFC - Media Bank: Crocs Says 'Relax'...



  • "Crocs is giving millennials a reason to kick back and relax. [Crox] declared Sept. 28 International Comfort Day... As part of Crocs’ initiative this Saturday, retail stores throughout the Americas, Europe and Asia will offer consumers a 20 percent discount. The company also will donate 20,000 pairs of shoes to individuals in need."
  • "Timberland is bringing some lightheartedness to the workplace. For the brand’s Pro line of workboots, advertising firm The Martin Agency created a range of TV spots that depict industrial 'work fails.'"
  • "The ads debuted this week on a variety of cable networks, and microsite Stayonyourfeet.com also launched in conjunction with the commercials."


Takeaway: With Timberland, we get it. Crocs – not really.  


TGT - Target Introduces Target Ticket, a Family-Friendly Digital Video Service



  • "[TGT] announced that Target Ticket, its new digital video service, is available to guests nationwide."
  • "Target partnered with Common Sense Media, a San Francisco-based non-profit organization best known for its reviews of movies and television shows. Through the partnership, Target Ticket gives guests access to thousands of reviews, making it easier for parents to choose the right content for their children."



Consumers Are Talking…Are Brands Listening?



  • "Once consumers became comfortable purchasing apparel online, brands and retailers sought to enhance the experience through social media sharing options, crowdsourcing — and online customer comments sections. What may have begun as a means of increasing sales via search engine optimization has grown to be a barometer of what’s in and what’s out of favor with the buying public."
  • "Cotton Incorporated set out to quantitatively measure these customer comments, and the result – the Cotton Incorporated Customer Comment Project – reveals what makes apparel consumers rant or rave about their purchases."
  • "Ultimately, the project looked at a collection of more than 200,000 customer comments from 25 key retailer websites including: mass market retailers; chain, department and specialty stores; online-only retailers; and sports specialty stores."
  • "Kantar Retail’s Anne Zybowski, vice-president of retail insights, says comments boards are a high priority for some retailers…'We’ve seen some retailers whose redline or clearance items correlate with a product’s negative online review.'"
  • "The Customer Comments Project also revealed some surprising findings about key products. Positive ratings for denim jeans are the lowest compared to other major categories studied, and uncover significant consumer dissatisfaction with negative textile issues, as well as fiber substitution away from cotton."
  • "Now that cotton prices have stabilized, those retailers who turned to synthetics may want to consider switching back to natural fibers like cotton – or risk the wrath of their customers, who can turn to those very sites to share their discontent with a ready audience."


What’s New Today in Retail (9/25) - chart2 9 25

What’s New Today in Retail (9/25) - chart3 9 25


Three Nations Pledge $24M for Bangladesh Factory Plan



  • "Canada, the Netherlands and the U.K. have signed an agreement with the International Labor Organization to boost labor inspection and upgrade building and fire safety in Bangladesh’s garment sector."
  • "The three nations 'combined pledged $24.3 million' in support of the ILO-led plan, officials and diplomats familiar with the details of the program, launched in New York during the annual meeting of the United Nations General Assembly, told WWD."
  • "The ILO plan is supported by other parallel initiatives focused on the ready-made sector in Bangladesh, namely the Accord on Fire and Building Safety in Bangladesh that was signed by some 80 global clothing brands and retailers, and covers 1,800 factories, and the Alliance for Bangladesh Worker Safety, a binding five-year undertaking by North American apparel companies and retailers to improve safety in more than 500 factories."