EVENTS TO WATCH OVER THE NEXT 24 HOURS
FOSL - Earnings Call: Tuesday 11/5 4:30 pm
ANF - Analyst Day: Wednesday 11/6 8:30 am
RL - Earnings Call: Wednesday 11/6 9:00 am
ICSC - Chain Store Sales Index
Takeaway: Retail sales decelerated for the second week in a row. Not to a disastrous extent -- but definitely not the rate of change we want to see headed into the start of the holiday shopping season.
GPS - A little confusion at Old Navy these days
Takeaway: Not exactly the message Gap wants to be sending to teens.
DKS, DIS - Dick's Sporting Goods to Run ESPN’s Online Fan Shop
- "Dick's Sporting Goods and ESPN today announced a multi-year agreement in which Dick's will serve as the exclusive e-commerce provider of licensed merchandise and sporting goods on ESPN.com and related digital properties."
- "This is the latest evolution in a growing relationship between ESPN and Dick's Sporting Goods, which also includes sponsorship of ESPN’s Champ Week coverage for college basketball, and content collaborations such as Hell Week, an original documentary produced by Dick's Sporting Goods Films in association with ESPN, which aired on ESPN2 and ESPNU earlier this year."
- As a result of the new agreement, fans will now be able to shop an expanded range of licensed fanwear available at the rebranded ESPN Fan Shop powered by Dick's Sporting Goods, located at dicks.com/espnfanshop.
- "Contextually integrated shopping opportunities will be featured across ESPN platforms in the near future – including ESPN.com, ESPN The Magazine, ESPN Radio and mobile properties like ScoreCenter, GameCast and WatchESPN – allowing fans to easily purchase officially licensed products…"
Takeaway: Definitely a positive move for DKS. But is it material enough to offset the fact that it can't seem to comp in it's own stores?
MW, Allen Edmonds - Allen Edmonds Bought by Private-Equity Firm Brentwood
- "Allen Edmonds Corp., a maker of high-end men's shoes that generated some takeover interest from Men's Wearhouse Inc...has revealed it has agreed to be sold to another buyer."
- "The closely held shoe maker on Monday said it agreed to be acquired by Brentwood Associates, a Los Angeles-based private equity firm. Terms of the deal weren't disclosed."
Takeaway: This is a punch in the jaw to MW, as Allen Edmonds would have been an exceptional fit. Perhaps Allen Edmonds was swayed by the fact that it is building its own retail business in rather high-end locations -- and did not want to be a part of a retailer it perceives to be old and stuffy.
TGT - Target cleans up in NY’s Grand Central
- "Target turned heads at New York’s Grand Central Terminal Monday morning with its newest popup store featuring an exclusive collection of bath and body products by Sonia Kashuk."
Takeaway: Not quite sure how much TGT paid for the real estate -- even though it's temporary. But you can't deny the fact that it picked one of the top foot-traffic locations in the world.
AMZN - Amazon Launches Do-Good Site
- "on Oct. 30, Amazon.com launched AmazonSmile, a separate website that allows shoppers to direct 0.5 percent of their purchase totals toward a charitable organization of their choice."
- "Some products sold on Amazon.com, including Kindle e-books and other digital media products, won't be eligible for the program. But otherwise, the pricing, selection and experience customers receive on AmazonSmile.com will be identical to the regular Amazon site."
Takeaway: Great idea -- from a socially-responsible perspective. But to exclude their highest grossing item -- especially one that is a proprietary product -- seems borderline ridiculous.
LULU - Lululemon Deals with New Round of Complaints about Yoga Pants
- "The new batch of complaints has focused on a couple of styles of pants -- Groove and Wunder Under, according to news reports."
- "A Lululemon spokeswoman said in an email that the problem isn't widespread, and that only a very small number of customers has complained. Her email mentioned only Groove Pants, not Wunder Under."
- "'We've heard from a very small number of guests that they have experienced some piling on their Groove Pants,' spokeswoman Alecia Pulman said in the email Friday. Her email was in response to queries from Reuters and other news organizations. 'The information we have tells us that piling is not a widespread concern and this guest feedback is not indicative of a larger issue,' she said."
Takeaway: Great example of how a company that had one PR blunder now has to deal with the press making a mountain out of a molehill. If the Luon debacle never happened, this would be a non-event.
J Crew, AEO, WSM - J Crew eyes share of Britain's retail bonanza with new Regent Street store
- "When...J Crew, opens its first major British outlet on Regent Street in London this week it will be just the latest foray from a battalion of US retailers levelling their sights on the competitive UK market."
- "Hot on the heels of the...fashion retailer could be American Eagle, a casual clothing chain, which is thought to be looking to sign its first outlets in London, probably at the Westfield shopping centres in Stratford and White City."
- "Meanwhile, homewares group Williams-Sonoma is set to open its first store in the UK, a branch of its upmarket West Elm brand, on Tottenham Court Road in central London on 5 December. It is understood to be looking for at least five more London stores and may take its Pottery Barn fascia there next year."
Takeaway: Makes perfect sense. In fact, it's a bit surprising that J Crew doesn’t have a bigger presence in the UK already. It's not exactly a brand-new early-cycle brand.
M - Bloomingdale's Glendale Store Sets New Focus
- "Bloomingdale’s is back on the expansion path, with a 115,000-square-foot unit in the Glendale Galleria in Los Angeles set to open Friday."
- "The Glendale site advances Bloomingdale’s strategy for opening scaled-down department stores and for trading up. It also marks the retailer’s first department store opening in three years."
Takeaway: We're not a fan of M by a long shot. But a massive redeeming factor that always makes us double check our thesis is the fact that it owns Bloomies. It's beyond debate that it is one of the best retailers in the apparel/accessories business. That said, it's not big enough to offset our view that Macy's Inc is nearing an ungrowable level of sales/square foot, margins are near peak, capital intensity is increasing, and expectations are high.
PVH, GIII - PVH Corp. and G-III Apparel Group, Ltd. Complete Sale of G.H. Bass & Co. Business
- "PVH Corp. and G-III Apparel Group, Ltd. announced today that they have completed the previously announced sale of substantially all of the assets of PVH’s G.H. Bass & Co. division to a subsidiary of G-III. Gross proceeds from the transaction were approximately $50 million, paid in cash."
Takeaway: Good riddance. Between Calvin and Tommy -- PVH has its hand full with two quality brands with global relevance. The last thing it needs is Bass.
Bangladesh Wage Board Finally Makes Recommendation; Gazipur Overrun By Violent Protests
- "A special ad hoc panel convened by the government has decided to increase the minimum wage to about 5,300 takas ($66) per month, a 77 percent increase from the previous benchmark of 3,000 takas ($38)."
- "The Ministry of Labor still has to approve what only amounts to a non-binding recommendation. Kalpona Akter, the executive director of the Bangladesh Center for Worker Solidarity, a non-governmental activist group that represents workers, has already voiced complaints that the wages will still be the lowest in the world. Also, Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association, also made clear that his organization has yet to accept the wage increase."
- "Riots have roiled Gazipur, closing down fifteen factories. Throngs of angry workers have reportedly broken the windows in at least twenty buildings, also vandalizing cars. Apparently, they are demanding a wage hike to at least 8,000 takas (about $103)."
Indian Factory Fire Kills Six
- "A fire erupted in a textile factory in New Dehli, India, killing at least six workers, including four women….A fire department official said, 'The initial investigation suggests that a short circuit was the cause of the fire, but a definitive conclusion has still not been reached.'”