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Takeaway: Ullman named Chair of Dallas Fed Board. Sign of limited term at JCP? H&M crushes – everyone. AMZN goes after COST Sam’s. ADDDY M DEST BRBY


ADS, SPD - Mike Ashley could buy 5% stake in Adidas after it stopped Sports Direct from selling Chelsea kit


  • "Mike Ashley, billionaire founder of Sports Direct, could buy a 5 per cent stake in Adidas in retaliation for the sportswear manufacturer’s decision not to provide his stores with replica Chelsea Football Club kits next season, according to a report."
  • "Sales of Chelsea products are worth up to £10million a year to Sports Direct so Adidas’s move prompted a sharp fall in the share price."

Takeaway: The list of people and companies Mike Ashley has crossed in his storied career is very long. He traditionally goes for the jugular -- even when it's not necessary.  Not a guy you want to be a major shareholder of your company, Adidas.

HMB - Sales development in November 2013 and Fourth Quarter 2013


  • "The H&M Group total sales including VAT increased by 21 percent in local currencies in November. Sales in comparable units increased by 10 percent. The strong sales development in November has been positively affected by calendar effects of approximately 3 per cent and by favourable weather."
  • "In the fourth quarter of 2013, i.e. 1 September to 30 November, sales including VAT increased by 13 percent in local currencies compared to the corresponding quarter last year. Sales in comparable units increased by 3 percent in the fourth quarter."

Takeaway: Weather or no weather, the reality is that H&M is annihilating almost every other apparel retailer in the world. We wonder if Lululemon cares that H&M is coming out with a Yoga line?

M, DEST - Destination Maternity's Exclusive Deal with Macy's


  • "Destination Maternity Corp. will become the exclusive provider of maternity and nursing apparel for macys.com, beginning late January."
  • "Destination Maternity operates leased departments in over 600 Macy’s locations, which typically carry a combination of Motherhood Maternity, A Pea in the Pod, A Pea in the Pod Collection and Jessica Simpson Maternity branded merchandise."

Takeaway: This is much more of a  win for DEST than for M. Will this make more pregnant women shop at Macy's? Probably not, The reality is that there will be a better selection at DEST's own web site. But for the women shopping Macy's anyway, and are looking for maternity clothes, on the margin it will obviously benefit DEST.  What we don't know is the extent to which Macy's will stipulate that DEST has to change/minimize the offering on its own site in order to win this deal.

JCP - Mike Ullman Named Chairman of Dallas Federal Reserve Bank


  • "The Federal Reserve Board on Friday designated the chairs at the 12 Federal Reserve Banks for 2014. Myron E. 'Mike' Ullman 3rd, who is chief executive officer of J.C. Penney Co. Inc., was named chairman of the Dallas Federal Reserve Bank."
  • "Ullman was appointed to the Dallas Fed Board in 2008, and was deputy chairman in 2011."

Takeaway: Huh? This one is a head scratcher. Apparently the Federal Reserve Board does not care much about a) the stock price of the company for an executive that gets such a prestigious appointment, or b) the fact that the person has a 100 hr/week job and can't (or shouldn't) offer up the time that this appointment arguably needs. One interesting point is that perhaps Ullman wouldn't have accepted this appointment if he planned on being at JCP for too much longer.

AMZN - Amazon said to launch Pantry to take on Costco, Sam's


  • Amazon.com is working on a new business called Pantry that will help it expand further into the giant consumer package goods market and take on warehouse club stores Costco and Wal-Mart's Sam's Club, according to three people familiar with the effort. Pantry...is currently set to launch in 2014, the people said on condition of anonymity. They did not want to be identified because Amazon's plans are still private."
  • "The service will be targeted at existing members of Amazon's Prime shipping program. It will launch with about 2,000 products typically found in the center of grocery stores, such as cleaning supplies, kitchen paper rolls, canned goods like pet food, dry grocery items like cereal and some beverages."
  • "Amazon will let Prime shoppers put as many of these items into a set sized box, up to a specific weight limit. If the products fit and they don't exceed the maximum weight, Amazon will ship the box for a small fee."

Takeaway: This was a form of retail destruction waiting to happen. We have no doubt that AMZN will succeed in this realm -- our only question is whether it can do so profitably. If you think about it, the model is very similar to Costco. Pay an up front membership fee (in AMZN's case, it's Prime) for the right to buy goods just a few margins points above cost.  Our only concern is how long AMZN will be comfortable operating at a loss while it establishes a foothold. Our bet is anywhere between 3-5 years (about the time when they plan to have drones delivering their packages -- yes, it's still painful to write that).

AMZN - Amazon Doubles Ecommerce Webstore Fees Next Year


  • "...Amazon is significantly raising the cost of operating a Webstore next year, perhaps a sign that the company is more confident of the offering."
  • "The monthly fee will double for all merchants, and those using Amazon Webstore who also sell products through the Sell on Amazon program will pay double the current transaction fee as well, bringing it in line with Webstore-only merchant transaction fees."
  • "The new fees go into effect on February 4, 2014."

Takeaway: The merchants using Webstore have literally no recourse here. What are they going to do -- change up their outbound logistics and find a partner that might be as efficient as AMZN?  Their only hope is if Alibaba gets aggressive in wanting to steal away the business. Alibaba is much better at branding than it's US competitor. But unfortunately, it still lacks the consumer penetration.

FOSL, SHLD - NASDAQ OMX Group, Inc. : Annual Changes to the NASDAQ-100 Index


  • "As a result of the re-ranking, the following five securities will be removed from the Index: Fossil Group, Inc. (Nasdaq:FOSL), Microchip Technology Incorporated (Nasdaq:MCHP), Nuance Communications, Inc. (Nasdaq:NUAN), Sears Holdings Corporation (Nasdaq:SHLD) and DENTSPLY International Inc. (Nasdaq:XRAY)."

Takeaway: Anyone surprised?

BRBY - Burberry Unveils Beauty Box Concept


  • "Burberry Beauty Box, a new retail concept that sells the brand’s makeup, fragrance and accessories, has landed in Covent Garden here."
  • "The company plans to roll out Beauty Box to more locations. It is the first retail concept to launch after Burberry took its beauty business in-house, acquiring its license rights back from Inter Parfums SA at the end of 2012."

What's New Today in Retail (12/16) - chart1 12 16

Takeaway: Definitely one to watch. Whenever Burberry does anything new we take notice. The only knock on the concept is that consumers in this space want variety in brands as well as products. That's why the cosmetics counters at department stores are often the most profitable parts of the store. We question whether Burberry can scale this concept profitably as it it intends.

AMZN, WMT, AAPL - Amazon is top US retailer on Pinterest this Christmas shopping season


  • "Amazon.com is the most popular US online retail site when it comes to having web content shared on Pinterest, the pin-board style social network, in the run up to Christmas 2013. In a study of ten top US retail sites[1], images and pages from Amazon.com are being shared most frequently on Pinterest, with Walmart and Apple taking second and third positions respectively."
  • "Content from Amazon.com currently generates the highest average number of pins (shares) per week[2] (16,360) on Pinterest, followed by Walmart.com (5,778) with Apple.com (3,871) taking third place. The findings come from a study by digital marketing software and services specialist, Searchmetrics."
  1. amazon.com, 16,360 pins per week, 1,740,314 total pins, 5,637 followers
  2. walmart.com, 5,778 pins per week, 529,992 total pins, 33,337 followers
  3. apple.com, 3,871 pins per week, 1,111,959 total pins, 1,597 followers
  4. qvc.com, 325 pins per week, 54,935 total pins, 42,683 followers
  5. staples.com, 307 pins per week, 17,252 total pins, 2,025 followers
  6. bestbuy.com, 281 pins per week, 60,630 total pins, 4,047 followers
  7. netflix.com, 202 pins per week, 7,802 total pins, 445 followers
  8. sears.com, 29 pins per week, 1,511 total pins, 190 followers
  9. officedepot.com, 27 pins per week, 2,635 total pins, 1,994 followers
  10. dell.com, 9 pins per week, 2,715 total pins, 1,160 followers

CA - Carrefour to Create Shopping Mall Group


  • "Carrefour said it had signed a memorandum of understanding with real estate investment firm Klépierre to buy 127 shopping malls in France, Spain and Italy for a total of 2 billion euros, or $2.7 billion at current exchange."
  • "The world’s second-largest retailer behind Wal-Mart Stores Inc. said it planned to create a company that will encompass a total of 172 shopping malls adjoining its hypermarkets in Europe."


Visa, MasterCard $5.7 Billion Swipe Fee Accord Approved


  • Visa Inc. and MasterCard Inc. won approval for a $5.7 billion settlement that ended years of litigation with U.S. merchants over allegations that credit-card swipe fees are improperly fixed.
  • "Dozens of large retailers, including Wal-Mart Stores Inc., Amazon.com Inc. and Target Corp., as well as major airlines, health insurers and other consumer businesses criticized the deal. Some said the amount should have been higher and that a legal release preventing future lawsuits was written too broadly."
  • "Shortly after Gleeson issued his order, retailers and trade associations that opposed the deal including Wal-Mart, Amazon.com, 7-Eleven Inc., Barnes & Noble Inc. filed notices that they will appeal the decision."

British high street footfall drops 3.4% before Christmas retail rush


  • "Britain's high streets have suffered their biggest drop in shopper numbers for more than a year, according to a report that indicates a slow start to the festive retail season."
  • "The British Retail Consortium's latest numbers also showed a drop in footfall for out-of-town shops and for shopping centres, echoing sales data that has pointed to a tentative mood among Christmas shoppers."
  • "The BRC's figures, supplied by Springboard, revealed a 3.4% annual drop in footfall for high streets from September to November, the sharpest fall since August 2012."
  • "For November alone, footfall was down 2.9% on a year ago across all shop types. This matched October's drop and was largely caused by a 4.2% fall in high-street shoppers."