EVENTS TO WATCH
- FRAN - Earnings Call: Wednesday 3/26, 8:30am
- PVH - Earnings Call: Wednesday 3/26, 9:00am
- HMB - Earnings Call: Thursday 3/27, 9:00am
- LULU - Earnings Call: Thursday 3/27, 9:00am
- RH - Earnings Call: Thursday 3/27, 5:00pm
- FINL - Earnings Call: Friday 3/28, 8:30am
ICSC - Chain Store Sales Index
Still lackluster sales growth as measured by the ICSC sales index, but the 1.7% growth rate is ahead of a) the 1.5% rate we saw last week, and b) last year's 1.0%. Compares remain relatively easy (starting this week) through May.
JCP - Mike Ullman Set for Big Pay Increase
- Ullman...earned $2.4 million after his return to Penney’s as ceo in April. The sum included $811,000 for the prorated portion of his $1 million in annual salary and other compensation of $1.6 million, including $913,000 in personal use of corporate aircraft, making that perk larger than his collective paychecks, according to the definitive proxy filed with the Securities and Exchange Commission.
- "Ullman’s base salary has been raised to $1.5 million and, after forgoing eligibility for stock and option rewards and a cash bonus in 2013 as the company faced a rapid cash burn and an uphill battle to turn itself around, this year he will be eligible for a cash bonus of up to twice his salary and equity awards of up to $5.5 million, making his potential pay package $10 million."
Takeaway: We're leading the charge that Ullman should no longer be at JCP. But let's be fair, he probably deserves some financial recognition for how much he's helped the company since his return. We have no problem with his higher comp package -- though we wish it was contingent on him not spending any time as Chair of the Dallas Federal Reserve or on the Board of the National Retail Federation.
WWW, KATE - our new keds are here! let’s…
Takeaway: This is a far bigger deal for WWW/Keds than it is for KATE. Keep in mind that Keds used to be a $500mm brand in the US alone. Now it is down to about $110mm (it was at $80mm when Payless owned it). There is massive runway here.
WMT - Wal-Mart's new tool gives competitors prices
- "Wal-Mart told The Associated Press that it has rolled out an online tool that compares its prices on 80,000 food and household products...with those of its competitors. If a lower price is found elsewhere, the discounter will refund the difference to shoppers in the form a store credit."
- "The world’s largest retailer began offering the feature, called ‘Savings Catcher,’ on its website late last month in seven big markets that include Dallas, San Diego and Atlanta. The tool compares advertised prices at retailers with physical stores, and not at online rivals like Amazon.com that also offer low prices on staples."
Takeaway: This is a pretty savvy move by WMT. On one hand it will give customers the perception that they will always get the lowest price at Wal-Mart -- and yes, there are a lot of consumers that are completely comfortable going home after a shopping trip and entering UPC codes into their computer hoping to get some WMT bucks in the mail. But on the flip side, so many consumer goods are made specifically for retailers in different quantities sizes and shapes to avoid this kind of price discounting. In other words, you probably can't find the same exact package of Huggies at Target than you can find at Wal-Mart. Therefore the discount mechanism WMT is preaching won't apply. If there's any category it will work it is with thinks like Soda and canned goods. Though there's already great price transparency there.
UA - Under Armour Hires Fritz Taylor as VP, Run
- "Under Armour announced that Fritz Taylor has joined the organization’s footwear leadership team as vice president, run, effective immediately. In this position, Taylor will be directly responsible for guiding the merchandising and development of all running footwear, including men’s, women’s and youth offerings."
- "Prior to joining Under Armour, Mr. Taylor served in multiple management roles at Mizuno as Vice President and General Manager of Running, leading all aspects of their domestic running business. He also held a similar post as Senior Vice President, Footwear at Brooks, where he oversaw the design, development, merchandising and future concepts teams. Prior to Brooks, Taylor spent 19 years at Nike in various roles, including Product Director for Footwear and Category Footwear Leader for Running."
Takeaway: You don't last 19 years at Nike by being mediocre. This was a great hire by UA. Having an office in Portland is starting to pay dividends for UA.
LUX - Google Inks Glass Deal With Luxottica
- "Google...said it will partner with eyewear firm Luxottica as Google readies for the consumer launch of its Glass product later this year. Financial terms of the new deal were not revealed, and it applies only to the U.S."
- "According to Google, it will work with Luxottica on the design of all glass-compatible frames...Google revealed the first in-house designed frames for Glass in January. Sunglass styles retail for $150 and optical styles are priced a bit higher at $225."
Takeaway: This one was inevitable. Luxoticca is to sunglasses what Fossil is to watches -- no one else can execute on mass design and production of a fashionable version of Google Glass than Luxotica.
AEO - American Eagle Is Going to the Dogs for Charity
- "The line, which also has a charitable element benefiting the American Society for the Prevention of Cruelty to Animals, will be ready for stores for spring 2014."
- "The collection can be previewed at www.ae.com/dogs, and currently feature denim to tees to swim products. Consumers can sign up for a waitlist and then receive 20 percent off American Eagle purchases, with $1.00 per order benefiting the ASPCA. American Eagle said it aims to donate up to $100,000 towards the cause."
- "Preston Konrad, American Eagle's style director, said, 'Your dog's style is another form of expressing your own, and we are thrilled to bring American Eagle fashionable looks to our pups with the debut of American Beagle Outfitters.'"
Takeaway: First Ralph Lauren holds a fashion show for dogs, and now this? Seriously…can't these companies focus on selling apparel to humans?
SHOO - Steven Madden Teams to Buy Brian Atwood
- "Atwood and Steven Madden Ltd. have acquired the Brian Atwood intellectual property and related assets in a series of transactions involving Bluestar Alliance LLC and The Jones Group Inc.for an undisclosed amount."
- "The IP assets acquired by Atwood and Madden cover both the Brian Atwood and B Brian Atwood brands under a new entity that will operate as a separate division of Steven Madden, with Atwood holding a minority stake, according to Edward R. Rosenfeld, chairman and chief executive officer of Steven Madden."
Takeaway: Not sure of the price, so we can't say if it's a good deal. But price aside, this makes a ton of sense for SHOO. Atwood was one of JNY's most valuable properties, and helps Madden gain access to higher-end dress shoes for women.
WMT - Asda to axe around 200 jobs
- "Asda is to cut around 200 jobs as it forges a new five-year plan to tackle increasing competition from rival supermarkets and discounters."
- "Head office staff in Leeds and the Leicestershire market town of Lutterworth, where its clothing arm, George is based, were briefed on the plans on Monday."
- "The moves were part of a package of recommendations put forward by consultancy firm McKinsey, which also included calls for a widening of product ranges."
PVH - Arvind Limited Joins Indian Joint Venture with PVH Corp. for Operation of Calvin Klein Businesses in India
- "PVH Corp...announced that Arvind Brands and Retail Limited, a subsidiary of Arvind Limited, has replaced PVH’s prior joint venture partners in Premium Garments Wholesale Trading Private Limited, the licensee of the Calvin Klein trademarks in India. In connection with the transaction, Calvin Klein, Inc...entered into a new license with Premium Garments to distribute Calvin Klein Jeans apparel and accessories and Calvin Klein Underwear products in India."
PVH - Steve Shiffman to Succeed Tom Murry as Calvin Klein CEO
- "Steve Shiffman, currently president and chief commercial officer of CKI, will become chief executive officer on July 1, succeeding Tom Murry, who has been at the fashion firm for 17 years. Murry will become executive chairman, serving in an advisory role until he retires on Jan. 31."
- "Murry, 63, originally planned to change his role at CKI in mid-2016, but decided to accelerate the process by two years. He said he felt like the company would be in capable hands with Shiffman, with whom he has worked closely for the past seven years."