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Takeaway: New competition for AMZN & EBAY from Alibaba. Finally good week for Sales. Tory jabs COH. GILT & Goldman. URBN NKE/Adi ARO HD BKS DSW SHLD


FOSL - Earnings Call: Tuesday 2/11, 4:30pm


ICSC - Chain Store Sales Index

Takeaway: In what should have been a seasonally  slow weak, retail sales actually chugged along at a pretty good pace. That was the first positive dose of news we got all year. We need several more of them, however, to undo the damage that's been done.


Retail Callouts (2/11): NKE, URBN, AMZN/EBAY/Alibaba, COH, SHLD - chart1 2 11

Retail Callouts (2/11): NKE, URBN, AMZN/EBAY/Alibaba, COH, SHLD - chart2 2 11



URBN - Urban Outfitters Reports Record Q4 Sales


  • "Comparable Retail segment net sales, which include our comparable direct-to-consumer channel, increased 1%. Comparable Retail segment net sales increased 20% at Free People and 10% at Anthropologie and decreased 9% at Urban Outfitters. Wholesale segment net sales rose 24%."

Takeaway: Weakness at the flagship brand was worse than expected. We give the company credit for not blaming the elements and admitting that the weakness at Urban was primarily self-inflicted, but that doesn't change the fact that a lot needs to be done in order to fix the business. We think highly of the URBN management team and approach to growing the brands. If anyone can fix it, they can.

AMZN, EBAY, Alibaba - Alibaba Close to Launching eBay-Style Marketplace in US


  • "A new Alibaba subsidiary is close to launching a marketplace in the U.S. and has been on-boarding third-party sellers since late last year, EcommerceBytes has learned. 11Main.com has hand-picked eBay sellers to participate in the pre-launch phase."
  • "The marketplace is called 11 Main to connote 'Main Street' shopping from friendly mom and pop retailers. The plan is to charge charges sellers a 3.5% commission fee when an item sells with a $50 cap. There is no charge for selling printed books, DVDs and music. 11 Main is also actively encouraging sellers to consider lowering their prices since its selling fees are lower than eBay's. While 11 Main does have a 5-cent listing fee per month in certain categories, those fees are waived for sellers who use its selling tools."
  • "Chinese ecommerce company Alibaba had acquired eBay listing tools Auctiva and Vendio in 2010. The companies, both headquartered in California, gave it instant access to over 250,000 eBay sellers who at the time processed over $7 billion in GMV annually and were responsible for an estimated 5 - 10 percent of eBay's listings. 11 Main is leveraging the companies both for their technology and their seller base as it builds out the new marketplace."

Retail Callouts (2/11): NKE, URBN, AMZN/EBAY/Alibaba, COH, SHLD - chart4 2 11

Takeaway: Ebay has to be kicking themselves for that transaction. It'd be extremely difficult for Alibaba to compete for 3rd- party sellers without these US subsidiaries. That being said - the only way 11Main works is if its fees are more competitive than Ebay or Amazon. In the end, make no mistake, this is a BIG idea.

ARO - Aeropostale mulls raising capital from private equity -sources


  • "Aeropostale Inc is considering raising capital from private equity firms as the struggling teen retailer evaluates various ways to shore up both its balance sheet and its share price, four people familiar with the matter said on Monday."
  • "Aeropostale...faces pressure from investors to sell itself and is working with investment bank Barclays Plc to study its options, the sources said."

Takeaway: Let's set this record straight…'considering' raising capital means 'we've been trying to raise capital or attract a buyer'. ARO is one of those companies that probably shouldn't be public.

COH - Tory Burch Said Planning Move Into Men's


  • "Burch has lured Jeffrey Uhl away from Coach Inc., where he was a key member of the team that grew the brand’s men’s business to sales that are currently approaching $700 million. Once on board at Burch, Uhl is said to be taking on both women’s and men’s accessories. He is expected to start in a few weeks."
  • "A spokeswoman for Burch declined comment Monday, as did Uhl. But sources said Burch could launch men’s accessories as soon as next year."

Takeaway: Uhl may have become expendable when Vevers brought in Keith Warren from Louis Vuitton, but shaking up the leadership in a key growth category at a time when COH needs a good story doesn't look good to outside eyes. Men's is a point of emphasis for a number of companies in this space and adding Tory Burch to the fold makes it only more competitive. We wouldn't want to have to compete against her…she gets it.

Gilt Groupe - Gilt Groupe Said to Choose Goldman to Manage Web Retailer’s IPO


  • "Gilt Groupe Inc., an online retailer of discounted luxury goods, picked Goldman Sachs Group Inc. to manage its initial public offering, according to people with knowledge of the deal. Timing for the IPO has still not been decided, said the people, who asked not to be identified because the announcement hasn’t been made public."
  • "Goldman Sachs is an investor in Gilt and was part of a $138 million financing round in 2011, valuing the company at about $1 billion, that included Japan’s Softbank Corp. and venture investors General Atlantic and Matrix Partners. The company has raised a total of at least $240 million."
  • "In 2012, Gilt generated $550 million in revenue, excluding businesses it discontinued, up from $450 million the prior year. The company was expected to generate cash from operations by the end of last year, Peluso said in September."

Takeaway: Gilt may have missed its peak valuation window but there will be significant interest in this offering. We'll certainly have it on our radar.

SHLD - Sears rolls out new pickup service for online purchases


  • Sears has debuted In-Vehicle Pickup, a new service powered by the chain’s Shop Your Way mobile app that enables customers to pick up their online purchases at any Sears store within five minutes of arrival, without ever leaving the car.
  • "'The In-Vehicle Pickup option takes our 'Free Store Pickup - Ready in 5' guarantee even further and out to the parking lot,' said Leena Munjal, senior VP, member experience and integrated retail, Sears Holdings. 'In-Vehicle Pickup on this scale is an industry first and another example of how we are constantly innovating and adding benefits that make shopping a more convenient experience for our members.'"

Takeaway: No doubt its convenient for the consumer - but when you operate 135,000 sq. ft. stores it's probably not the right move to encourage shoppers not to enter your store. We get that Sears is trying to embrace e-commerce, but its current real estate portfolio doesn't jibe with that strategy.

ADDYY - Shop Talk: Adidas in New Orleans... RSG Buys in VA


  • "Adidas opened a pop-up shop, Adidas in the Quarter, in New Orleans as a part of the upcoming 63rd annual NBA All-Star Game. Located in the French Quarter of New Orleans, the store will feature official merchandise for the Feb. 16 game including men’s and women’s jerseys, apparel and accessories."
  • "The brand will also offer limited-edition shoes from Adidas Originals and basketball collections, including the D Howard 4, Crazy 8, Crazy 1 and new Crazyquick 2. In addition to player appearances and other in-store events, Adidas also launched a social media campaign centering on the store. The 2,400-sq.-ft. space is slated to stay open until Feb. 23."

Retail Callouts (2/11): NKE, URBN, AMZN/EBAY/Alibaba, COH, SHLD - chart3 2 11

Takeaway: Adidas may have its name on NBA jerseys but it’s no question that Nike owns the NBA. Player sponsorships as of the end of Dec. 13. = Nike-278, Adidas-71, Jordan-32. Good try by AdiBok to capitalize on the event. I think we know who would win if Nike opened a pop-up shop down the street.



HD - Home Depot bolsters online business with new direct fulfillment center


  • "The Home Depot has opened a new direct fulfillment center (DFC) in the Locust Grove suburb of Atlanta."
  • "It is the first of three new DFCs the company will open across the U.S. in the next two years, adding more than 3 million sq. ft…"

BKS - Barnes & Noble Fired Its Nook Hardware Engineering Staff


  • "Barnes & Noble laid off its Nook hardware engineers, according to a source that tipped Business Insider."
  • "The engineers were let go last Thursday, according to our source. This follows Barnes & Noble dismissing the VP of Hardware, Bill Saperstein in January."
  • "Barnes & Noble confirmed that it laid people off when we asked. A spokesperson told us:
  • 'We’ve been very clear about our focus on rationalizing the NOOK business and positioning it for future success and value creation. As we’ve aligned NOOK’s cost structure with business realities, staffing levels in certain areas of our organization have changed, leading to some job eliminations. We’re not going to comment specifically on those eliminations.'"

HBC - HBC Announces Resignation of CFO


  • "Hudson's Bay Company today announced that Michael Culhane has resigned as CFO of the Company effective February 7, 2014."
  • "As previously announced, Donald Watros, President of HBC, has assumed the role of acting CFO, and the Company has appointed Douglas Scovanner as Executive Vice President of Finance and Accounting, on an interim basis to support the acting CFO."
  • "HBC has engaged a leading executive search firm to assist in recruiting a new CFO."

DSW - DSW Inc. Announces Fourth Quarter Sales Results; Updates 2013 Guidance


  • "DSW Inc...announced that fourth quarter 2013 comparable sales for the thirteen-week period ended February 1, 2014 were flat compared to a 3.6% increase for the same period last year."
  • "Excluding luxury sales of $1 million, total Adjusted revenues decreased by 3.9% to$571 million, for the thirteen week period ended February 1, 2014 versus $594 million for the fourteen week period ended February 2, 2013. Excluding the impact of the fifty-third week last year, total Adjusted revenues increased by 1.6%."
  • "The Company narrowed its 2013 Adjusted EPS guidance to a range of $1.85 to $1.87 per share. Adjusted EPS excludes a $0.13 per share impact from the Company's luxury test and $0.10 per share of legacy charges related to RVI. The new guidance range compares to the previous guidance of $1.80 to $1.90 per share and represents approximately 11% earnings growth."
  • "The Company also announced Douglas Probst, Executive Vice President and Chief Financial Officer will be retiring effective May 1, 2014, after nine years of service."