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Takeaway: M opening round the clock. Why??? China retail unmistakably weak. Carrefour/WMT taking the wrong approach to India. JNY finally going away.

COMPANY NEWS

M -Macy's to Open Around the Clock on Christmas Weekend

(http://www.fierceretail.com/story/macys-open-around-clock-christmas-weekend/2013-12-19)

  • "Macy's has become the latest retailer to offer extended hours in an effort to squeeze out the last little bit of the holiday shopping season. A total of 37 Macy's store locations around the country will be open around the clock from 7 a.m. Friday Dec. 20 straight through 6 p.m. on Christmas Eve."
  • "For the stores that won't be pulling all-nighters, Macy's said it would offer extended hours at almost all of its stores from 7 a.m. to 2 a.m. starting Friday Dec. 20 through Dec. 23."

Takeaway: We'd love to see the numbers at the end of the holiday season (which we won't unfortunately) to see if staying open later/perennially actually has a positive impact on sales. We'd be floored if it turns out that staying open round the clock or to the wee hours of the morning does anything other than raise labor costs.

JNY - The Jones Group Announces Agreement To Be Acquired By Sycamore Partners For $15.00 Per Share In Cash

(http://phoenix.corporate-ir.net/phoenix.zhtml?c=85851&p=irol-newsArticle&ID=1886339&highlight=)

  • "The Jones Group Inc. and Sycamore Partners today announced that they have entered into a definitive agreement pursuant to which affiliates of Sycamore Partners will acquire The Jones Group for $15.00 per share in cash, or a total of approximately $1.2 billion. The transaction is valued at approximately $2.2 billion, including net debt. Upon completion of the transaction, The Jones Group will become a privately held company."
  • "Under the terms of the agreement, The Jones Group's shareholders will receive $15.00 in cash for each share of The Jones Group's common stock.  This represents a premium of approximately 19% to The Jones Group's  30-day volume weighted average stock price for the period ended April 11, 2013, the last trading day prior to when media speculation began regarding the Company's plans to sell all or parts of its portfolio. The agreement was unanimously approved by The Jones Group's Board of Directors."

Takeaway: The worst kept secret in retail. We get an early holiday present -- that JNY finally goes away.

CDI - Christian Dior's Prospects in China Remain Bright

(http://www.wwd.com/markets-news/designer-luxury/christian-diors-prospects-in-china-remain-bright-7321200?module=hp-topstories)

  • "Christian Dior chief executive officer Sidney Toledano said the brand’s prospects in Mainland China remain bright, despite fresh evidence that a government crackdown on corruption and ostentation is sharply denting demand for luxury goods in the world’s second-largest economy."
  • “'Our position in China is strong both in terms of image and market share gain, so I remain very confident regarding China, as far as Christian Dior Couture is concerned,' Toledano told WWD on the sidelines of the meeting. 'We have not been affected by the [crackdown on] gifting.'”

Takeaway: Dior is coming off a small base, and therefore can still grow in light of the lack of broad-based growth in the sector in China. But its comments overall support the problems in China that are echoed below.

CA - Carrefour might apply if Tesco passes muster

(http://www.business-standard.com/article/companies/carrefour-might-apply-if-tesco-passes-muster-113122000018_1.html)

  • "French group Carrefour, second largest retailer in the world after Walmart, is getting ready to open stores in India, it is learnt."
  • "The company is engaged in talks with potential partners, including Kishore Biyani's Future group, with which it was close to inking a deal a little more than two years earlier, a source said."
  • "Carrefour is likely to move forward with an application to invest in multi-brand retail stores in India, depending on how the government responds to the application of UK-based Tesco. Earlier this week, Tesco sent a proposal to the government to invest $110 million in Tata Group's Trent and run multi-brand stores in Karnataka and Maharashtra. The Foreign Investment Promotion Board might take up the Tesco-Trent proposal by the end of this month."

Takeaway: We're increasingly bearish on the concept of a  supercenter in India. The current 'mom and pop' retail landscape would be devastated. Will people have more income if they work at Wal-Mart or Carrefour? Probably. But that argument doesn’t hold up too well in light of all the local merchants that would be out of a job -- and would revolt accordingly. The best path to success for Carrefour or Wal-Mart is to somehow embrace the small merchants and make them a part of the shopping experience. Yes, that sounds wacky, and we don't know how it could be done. But that's the answer from where we sit.

COST - Costco settles promotion lawsuit for $8M, vows reforms

(http://seattletimes.com/html/businesstechnology/2022479586_costcosettlementxml.html)

  • "Costco Wholesale has tentatively agreed to pay $8 million and change its promotion procedures to settle a long-running lawsuit alleging it failed to give female employees an equal shot at management jobs."
  • "Costco Wholesale has tentatively agreed to pay $8 million and change its promotion procedures to settle a long-running lawsuit that alleges it failed to give female employees an equal shot at management jobs."

Takeaway: Not a big news item, but it's a precedent-setter. The biggest name to be impacted? Wal-Mart.

INDUSTRY NEWS

Report Cites Slowdown in China's Luxury Spending

(http://www.wwd.com/retail-news/marketing-consumer-behavior/report-cites-slowdown-in-chinas-luxury-spending-7321380)

  • "According to a report released this week by the consulting firm, luxury spending in China has slowed significantly. Bain estimates that luxury sales in Mainland China grew by just 2 percent in 2013, compared with 7 percent growth a year earlier. The consultancy said men’s wear and watches were particularly hard hit, with sales of luxury timepieces falling 11 percent."
  • "Bain expects the trend to continue through 2014, which is unsurprising given the high profile President Xi Jinping’s regime has put on anticorruption efforts. Thus far, however, the clampdown does not appear to include China’s top leadership and its own ties to family fortunes gained through political connections."

Takeaway: We rarely highlight studies by consulting firms, but this one draws some powerful conclusions.  Nike sneakers might not be considered a luxury item, but with price points often breaching $200, we think it's a fair barometer. NKE's 1% constant currency futures growth supports the premise that things have yet to pick up in China.