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Takeaway: Footwear/Jordan on fire. MW biz weakens as deal inks. Music to boost AMZN Prime. LB/Giselle lovers quarrel. H&M invades. Swatch sues TGT.



  • DKS - BofA Consumer & Retail Conference: Wednesday 3/12, 10:30am
  • JWN - BofA Consumer & Retail Conference: Wednesday 3/12, 10:30am
  • PETM - BofA Consumer & Retail Conference: Wednesday 3/12, 1:30pm
  • WSM - Earnings Call: Wednesday 3/12, 5:00pm


  • GCO - Earnings Call: Thursday 3/13, 8:30am
  • DG - Earnings Call: Thursday 3/13, 10:00am
  • ARO - Earnings Call: Thursday 3/13, 4:15pm
  • ZUMZ - Earnings Call: Thursday 3/13, 5:00pm


  • ANN - Earnings Call: Friday 3/14, 8:30am
  • BWS - Earnings Call: Friday 3/14, 9:00am
  • BKE - Earnings Call: Friday 3/14, 10:00am
  • HIBB - Earnings Call: Friday 3/14, 10:00am



Athletic Footwear


Sales over the past 3-weeks have been on a tear -- +27%, +10%, and +10% in each week, respectively according to NPD data. Brand Jordan has been particularly strong -- which is an understatement -- with trailing three week sales numbers up over 75% YY. The other callout would be UA, which released the Speedform Apollo two Fridays ago. Due to the timing of the release it's tough to get a good sense of sales trends - but one thing of note is that Units and $ are up big while ASP's are negative. This is due to two factors 1) liquidation of excess inventory, and 2) lower starting price point for the Speedform Apollo which retails for $99 compared to last years releases which started at $120.


MW - 4Q Earnings


Takeaway: Convenient for MW that they preannounced a quarter with their worst inventory position in years on the same day they ink the deal for the transformational JOSB acquisition.

Retail Callouts (3/12): FW, NKE, MW, AMZN, LB, HMB, TGT, Alibaba - chart1 3 12

MW, JOSB - Men's Wearhouse To Acquire Jos. A. Bank For $65.00 Per Share In Cash


  • "The Men's Wearhouse and Jos. A. Bank Clothiers today announced that they have entered into a definitive agreement under which Men's Wearhouse will acquire all of the outstanding shares of common stock of Jos. A. Bank for $65.00 per share in cash, or total consideration of $1.8 billion.  The boards of directors of both companies have unanimously approved the transaction."
  • "Men's Wearhouse shareholders will benefit from approximately $100 to $150 million of run-rate annual synergies realized over three years, through improving purchasing efficiencies, optimizing customer service and marketing practices, and streamlining duplicative corporate functions.  Additionally, Men's Wearhouse's vertical direct sourcing model will be leveraged to improve combined merchandising and sourcing across the combined company and rationalize inventory over time."
  • "The combined company will be the fourth largest U.S. men's apparel retailer with pro forma sales of approximately $3.5 billion.  This transaction brings together a high-value collection of national and owned brands.  Building on the two companies' complementary business models, the combined company will better serve an expanded customer base in more locations and optimize merchandising and sourcing capabilities."

AMZN - Amazon Working on Music-Streaming Service


  • "Amazon.com Inc. is hoping to offer an on-demand music-streaming service to customers of its Amazon Prime program, but it may limit how much a person can listen to any given song, according to people familiar with the matter."
  • "The Seattle-based company has held negotiations with record companies and music publishers seeking to license their music for the planned service, but it remains far apart from some record companies on financial terms, these people said."
  • "The music service is one of several new features that Amazon may add as it raises the price of Prime to as much as $119 a year."

Takeaway: AMZN's world continues to revolve around Prime -- much like how Costco's revolves around its membership fee. COST loses money excluding its fee -- AMZN loses money regardless. Perhaps a boost in Prime would put AMZN solidly into the black, as $119 per year represents a 50% increase from current levels. But customer attrition is obviously critical. Sounds risky to us.

LB - Gisele Bundchen Is No Angel as Victoria’s Secret Rival


  • "Gisele Bundchen...is teaming up with closely held lingerie maker Hope to open the first Gisele Bundchen Intimates store in Sao Paulo in May. That same month, a Victoria’s Secret-branded shop is set to begin selling bras and panties in Brazil."
  • "...Gisele will also help Sao Paulo-based Hope open stores in London, New York, Los Angeles and other major cities next year, said Fabio Figueiredo, the company’s director of expansion. Hope aims to more than double the number of countries where it sells its underwear to 40 this year, he said."

Takeaway: LB has zero recourse on this one. The damaging part is not that it no longer has Giselle, but that she's helping to build a competitor.

TGT, UHR - Swatch Files Lawsuit Against Target Corp.


  • "Swatch AG has filed a lawsuit against Target Corp., alleging the discounter of selling watches that copy its designs."
  • "The filing includes images of Swatch and Target watches with zebra-printed wristbands, as well as multicolor watches from both companies. Swatch’s round, brightly colored face without numerals are among the item’s elements, the suit notes."
  • "Swatch described the quality of Target’s watches as “inferior” to its own and said the continued sale of those watches is likely to confuse shoppers and damage the company’s sales. Swatch’s aim is to have Target cease selling the alleged copies, recoup profits from prior sales and attain damages."

Takeaway: Seriously…this is all Target needs right now. Jewelry/Watches is a reasonably profitable part of the store, and profit is driven not by $45 Timex Ironman watches, or Disney watches at $16.99 -- but by its similarly-priced product under its own store brands. The challenge for Swatch will be in proving that the designs are proprietary. But Swatch is traditionally not a very litigious company -- it only picks a fight when it really thinks it can win.


HMB - H&M's COS Set to Cover the Coasts


  • "H&M’s plans for COS’ arrival in the U.S. are taking shape. After the first COS store in the U.S. premieres this spring at 129 Spring Street in New York’s SoHo neighborhood, the sleek, professional sibling of H&M has set its West Coast debut by signing a lease for an estimated 13,000-square-foot unit at 357 North Beverly Drive in Beverly Hills. COS, which stands for Collection of Style, has about 80 stores worldwide, but has yet to open stores in the U.S."
  • "COS isn’t only coming to America via its own stores. The retailer will continue a partnership started last year with Opening Ceremony by opening pop-up stores at the designer retailer’s outposts in New York and Los Angeles on April 17. The COS pop-up stores at Opening Ceremony will last until supplies run out. COS will be made available on opening ceremony.us as well."


Retail Callouts (3/12): FW, NKE, MW, AMZN, LB, HMB, TGT, Alibaba - chart3 3 12


Takeaway: There are maybe two or three companies in retail where we pay attention to WHATEVER they do. H&M is one of them. We hope other retailers in the US are doing the same.


Alibaba - Alibaba buys majority stake in ChinaVision


  • "Alibaba...has paid more than $800m for a majority stake in Hong Kong-listed ChinaVision Media Group, continuing a string of acquisitions that total nearly $3bn over the past year."
  • "Alibaba is preparing for an initial public offering expected for this year either in Hong Kong or New York that is expected to value the company at more than $100bn...Most of Alibaba’s recent acquisitions have been intended to shore up perceived weaknesses ahead of the IPO, mainly in the area of mobile internet."
  • "The ChinaVision deal will address what analysts say is Alibaba’s competitive disadvantage in video entertainment, where it lags behind both Baidu and Tencent. China’s online video scene is already the biggest in the world, with more than 400m viewers and hundreds of millions more set to join as superfast 4G connections become more popular."

Ace Metrix Unveils Top Ad Brands


  • "Ace Metrix’s Blackbook list of the most effective television advertising brands is out, and Reebok scored the top spot."
  • "Winners are based on their Ace Scores, which reflect the interplay between an ad’s measured 'persuasion' — comprised of likability, information, attention, change, relevance and desire — and its measured 'watchability' and the likelihood of watching the ad again. All nationally aired ads are scored by more than 500 U.S. consumers weighted to the U.S. census for age, gender and income."

Retail Callouts (3/12): FW, NKE, MW, AMZN, LB, HMB, TGT, Alibaba - chart2 3 12

Takeaway: Yesterday we highlighted a survey of the least favorite brands, as measured by an independent survey of 32,000 consumers. American Apparel, Sears and K-Mart all scored among the most hated. But this survey is tougher to stomach. Only 500 consumers -- and they collectively rated Reebok and Skechers ahead of Nike. Seriously?

ANF - Hollister to Sell SeaVees Footwear


  • "...Hollister will feature an exclusive male footwear line from SeaVees featuring signature Hollister colors on twill lace-up and slip-on sneakers."
  • "The exclusive line, which will be available only at hollisterco.com, is the latest effort to move the businesses toward a wholesale model."

SQBG - Sequential Taps Jameel Spencer as CMO


  • "Sequential Brands Group Inc. has hired brand strategist Jameel Spencer as chief marketing officer, a new position. Spencer will report to Sequential chief executive officer Yehuda Shmidman."
  • "Prior to joining Sequential, Spencer was cmo at Iconix Brand Group, and oversaw the marketing for brands such as Ed Hardy, Ecko, Umbro, Rocawear and Roc Nation."
  • "In his new role at Sequential, Spencer will develop and lead global marketing initiatives for the firm’s portfolio of brands that include William Rast, DVS, Caribbean Joe, Ellen Tracy and Revo, among others."