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Takeaway: Nike puts out another $25k shoe. Watch the H&M spawn. Nike and Adidas battle w/ new apparel lines. More hints of Alibaba dominance.

EVENTS TO WATCH OVER THE NEXT 24 HOURS

ICON - Earnings Call: Tuesday 10/29 10:00 am

 

COMPANY NEWS

NKE - Converse Collaborates With Nate Lowman and Just One Eye

(http://www.wwd.com/footwear-news/markets/converse-collaborates-with-nate-lowman-7247040?module=Footwear%20News-Markets-second)

  • "...a new collaboration spearheaded by Los Angeles concept shop Just One Eye has turned the iconic sneaker into a canvas for Nate Lowman.  The New York-based multimedia artist created 21 unique high-tops using two of his own deconstructed works."
  • "Priced at $25,000, each limited-edition pair is lined in Italian calf leather and required 180 hours of work."

What's New Today in Retail (10/28) - chart1 10 28

Takeaway: That's $139/hr in labor. Pretty reasonable for an up and coming artist.

HMB - COS Builds Base for Expansion

(http://www.wwd.com/retail-news/specialty-stores/cos-eyes-us-7248984?module=hp-topstories)

  • "The much-anticipated younger sibling of H&M is opening its first U.S. store, a 4,500-square-foot flagship at 129 Spring Street in SoHo here, in spring 2014."
  • "COS, which stands for Collection of Style, is eyeing other locations in Manhattan, and plans to enter markets across the U.S. such as Chicago and California as it moves closer to a rollout in this country."
  • "COS, whose prices start where H&M’s leave off, offers modern, stylish and timeless collections produced from materials such as leather, fine suiting and cashmere. Prices range from $39 to $390 for dresses and $225 to $450 for men’s outerwear.  In addition to men’s and women’s wear, a full children’s collection launched in 2009."

Takeaway: Anytime HMB does anything, we watch and listen. The most notable factor here is that COS is testing the upper echelons of the price spectrum. That's not a slam-dunk by any means. If you asked 100 consumers why they shop at H&M, 50 would say its stylish, but the other 50 would say it's cheap. We're curious to see how the new M.O. resonates with consumers.

JCP - JCPenney picks shopkick mobile app to reward customers

(http://www.fibre2fashion.com/news/garment-company-news/newsdetails.aspx?news_id=154602)

  • "J. C. Penney Company, Inc. announced that it has teamed up with shopkick, the most widely used real-world shopping app that rewards shoppers for simply walking into stores."
  • "Just in time for the key holiday shopping season, JCPenney shoppers will be able to earn 'kicks,' shopkick's proprietary reward currency, along with special offers from JCPenney, when visiting the retailer's nearly 1,100 store locations across the country. To celebrate the launch, JCPenney will be offering shopkick users additional kicks for a limited time when they visit a JCPenney store."
  • "When a shopkick user walks into a participating store, the app detects the shopkick signal emitted from a patent-pending device, which is picked up by the shopper's smartphone. The app then deposits kicks, which can be collected and redeemed for gift cards, song downloads, movie tickets, Facebook credits, donations to charities and more."

Takeaway: Yet another new initiative that no one will give JCP one iota of credit for.

KER - Puma's Revenues Slide in Q3 

(http://www.sportsonesource.com/news/article_home.asp?Prod=1&section=4&id=48494)

  • "Puma's Q3 revenues slid 7.6 percent in the third quarter to £824.8 million ($1.14 bn) from £892.2 million, according to a revenue update from its parent, Kering. Puma’s sales for the quarter were down 0.8 percent on a comparable basis. The decline was due to lower footwear sales. Accessories and apparel were up 7 percent and 4 percent, respectively."
  • "By country, Kering noted in its presentation with analysts that sales in North America, representing 20 percent of Puma's sales, grew 5 percent. In other regions, Western Europe (representing 34 percent of Puma's sales) was down 2 percent; Japan (8 percent), was down 6 percent; Asia Pacific (13 percent), slipped 1 percent; and Other Countries (25 percent) was also off 1 percent."

Takeaway: At least Puma put up a +5% number in the US.  It might not be its biggest region, but it's one of the most important.

HBC - Hudson's Bay Co. Taps Michael Crotty and Russ Hardin

(http://www.wwd.com/retail-news/people/hbc-names-crotty-and-hardin-7250656?module=hp-topstories)

  • "Hudson’s Bay Co...has named Michael Crotty executive vice president and chief marketing officer, and Russ Hardin senior vice president and chief creative officer."
  • "Crotty has more than 25 years experience in multichannel retailing, marketing and brand management...Rodbell [incoming President of the HBC Department Store Group] said Crotty will be responsible for the overall marketing strategy for Hudson’s Bay and Lord & Taylor."
  • "Hardin recently worked at Kohl’s...Rodbell said Hardin will be responsible for building all creative elements for Hudson’s Bay and Lord & Taylor, and lead social media, public relations and event activities."

Takeaway: If HBC can source such talent, can someone explain to me why JCP can't find a CEO?

NKE - Nike unveils Hi-Vis winter apparel collection

(http://www.fibre2fashion.com/news/garment-company-news/newsdetails.aspx?news_id=154652)

  • "...Nike has created the Hi-Vis Collection of winter apparel, footwear and equipment enabling athletes to train and play at the same intensity throughout the season and with zero distractions.  The Hi-Vis Collection features bright and contrasting color combinations of Volt, Electro Purple, Green Glow and Electric Green on the apparel, footwear and equipment."

What's New Today in Retail (10/28) - chart3 10 28

Takeaway: This is a big deal for Nike, as it has been absent in large part from cold-weather gear since it backed away from its All Conditions Gear (ACG) line.

ADS - Adidas & NBA to debut new on-court collection

(http://www.fibre2fashion.com/news/garment-company-news/newsdetails.aspx?news_id=154651)

  • "As tip-off nears on Oct. 29, adidas and the NBA will debut an all-new premium collection of on-court apparel. The NBA On-Court Collection will outfit all 30 NBA teams…"

What's New Today in Retail (10/28) - chart2 10 28

Takeaway: Nike hates this kind of press. That said, it would rather focus its efforts on what people wear on their feet -- not their warm-ups.

LVMH - Kenzo Opens Shanghai Store

(http://www.wwd.com/retail-news/designer-luxury/kenzo-opens-shanghai-store-7249308?module=hp-topstories)

  • "Located in the newly opened L’Avenue mall in the city’s western district of Hongqiao, the 2,500-square-foot store is the brand’s seventh point of sale in China’s financial capital."
  • "L’Avenue is a joint venture between LVMH Moët Hennessy Louis Vuitton’s real estate arm, L Real Estate, and Hong Kong real estate developer Stanley Ho. It’s populated with some of LVMH’s leading brands, including Louis Vuitton, Dior, Fendi, Céline and, now, Kenzo."

INDUSTRY NEWS

Western Retailers See Online as Ticket to China

(http://online.wsj.com/news/articles/SB10001424052702304799404579157081461605904?mod=WSJ_business_whatsNews)

  • "The promise of e-commerce in China has attracted foreign companies for years. Yet Western companies, such as eBay Inc.,  Google Inc., and Groupon Inc., have struggled in China, partly because of competition from domestic giants. Western retailers also have had concerns about the difficulties of distribution in the country and its Web shoppers' insistence on low prices."
  • "But China's e-commerce—which, by some measures, overtook the U.S. this year as the world's largest online retail marketplace—has become too big to ignore. Online retail sales in China are expected to reach about $540 billion by 2015, compared with roughly $345 billion in the U.S., according to consulting firm Bain & Co. China's online retail sales have increased more than 70% annually since 2009, compared with 13% in the U.S."
  • "After closing branded stores in China, do-it-yourself home retailer Home Depot Inc. and electronics chain Best Buy Inc. this year opened stores on Alibaba's Tmall, the country's leading online consumer marketplace."
  • "China's shoppers also have come to expect heavy discounts, putting pressure on profit margins. In a Bain survey of 1,300 online shoppers in China this year, half the respondents said price was the No. 1 reason they shopped online."

Takeaway: Watch out for the Alibaba IPO. We've never seen such a dominant business model in anything that touches the consumer.

UPS forecast confirms e-commerce growth

(http://www.retailingtoday.com/article/ups-forecast-confirms-e-commerce-growth)

  • "A compressed shopping season coupled with the continued growth of e-commerce has UPS forecasting that peak season daily package volumes will grow by 8%."
  • "UPS said it expects December 16 to be its highest volume day of the year with package pick-up expected to total 34 million. To put the growth of e-commerce in perspective, UPS said this year it expects there will be five delivery days within the peak season when package volume exceeds its busiest day last year. For example, after December 16, UPS said its next busiest volume day is expected to be Cyber Monday, December 2, when package volumes are forecast to total 32 million."

Takeaway: Unlike all those 'dart-throw' surveys by the NRF and various consulting firms, the UPS forecast is about as accurate as it gets.

What's Selling: Comfort

(http://www.wwd.com/footwear-news/retail/whats-selling-comfort-7247699?module=Footwear%20News-Retail-main)

THE COMFORT SHOE SOURCE, Glen Burnie, Md.

  • Propét Alta tall fleece boot
  • Cobb Hill Elaine embellished flat
  • Aravon Wendy loafer

Top fall trend: “More people are coming in looking for a casual shoe,” said Pam Dulaney, store manager. “However, the weather is still nice.”

DANCY’S, Boone, N.C.

  • Alegria clogs and Mary Jane styles
  • Aetrex Valerie stretch-vamp skimmer
  • Orthaheel 

Top fall trend: “Boots are taking off,” said GM Russell Gullet. “GoLites [are popular] in winter because they’re comfortable, warm and waterproof.”

WHEN THE SHOE FITS, Vancouver, Wash.

  • Dansko Tamara clog-based slip-on
  • Keen Toyah lace-up style
  • Merrell Encore clog series

Top fall trend: “Customers want to be a little dressier with comfort [features],” said President Alan O’Hara. “They prefer a little heel, and brands such as Pikolinos, Taos and Earthies have options in this [area].”

ELEMENTS, Berkeley, Calif.

  • Earth Catamount wedge boot and Bellweather skimmer
  • Fly London Yoko platform wedge
  • Bernie Mev woven upper on memory-foam outsoles 

Top fall trend: “Ankle boots are a new trend this season,” said manager Penelope Adibe. “We are also doing well with wedges.”

HARRISONS FOOTWEAR, Poulsbo, Wash.

  • Wolky Rosa lace-up style
  • Pikolinos ankle boots
  • Brooks Addiction

Top fall trend: Ankle boots are performing at the store, said owner Chris Harrison. “Women already own knee-high boots, and they last a long time.”

 

Cambodia: 22% Spike In Garment Exports

(https://www.sourcingjournalonline.com/cambodia-22-spike-garment-exports/)

  • "Cambodia’s garment export sector is booming according to numbers recently released showing a healthy increase of 22 percent in the nation’s shipments of clothing to foreign customers from the first of the year through September."
  • "Total value of the exported apparel during the nine-month period hit $4.1 billion, substantially higher than the previous period last year of$3.44. As usual in recent years, the US was Cambodia’s best customer for their apparel, importing about $1.21 billion in goods."
  • "Cambodia is one of the latest countries of Southeast Asia to emerge as a major sourcing center as international firms send more business to that part of the world, attracted by low labor costs and a government and political environment hospitable to business."