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Takeaway: KATE partners with GPS to test viability of kid's brand extension. What to do with RSH real estate? HD looking to grow dot.com



  • LULU - Analyst Day: Thursday 4/17, 12:00 pm


KATE, GPS - Gap to partner with Kate Spade, Jack Spade on kids collection


  • "According to the announcement, the collection, which is expected to hit retail in November, will be available through Gap's website as well as Gap Kids bricks-and-mortar stores in the U.S., Canada, the U.K., France, Hong Kong and Japan."

Takeaway: KATE uses partnerships as a low risk beta test for new potential categories. They did it with footwear, and will use this GPS partnership to test the viability of kids before deciding whether or not it makes sense to add the brand extension to its growing list of categories.

RSH - RadioShack Mired in Talks With Lenders Over Closings


  • "RadioShack Corp. is mired in negotiations with its lenders over plans to close as many as 1,100 stores, complicating the struggling consumer-electronics retailer's turnaround efforts, said people familiar with the talks."
  • "The company, which operates about 4,300 stores in the U.S., said at the time that the plan still needed permission from its lenders, adding that its credit agreements allowed it to close only about 200 stores without the approval of lead lenders Salus Capital Partners and GE Capital, a unit of General Electric Co."
  • "Some of the lenders are exploring whether as many as 2,000 stores should close, people familiar with the matter said, though others said that possibility hasn't become part of negotiations with the company. The company is set to keep the proceeds of any store-closing inventory liquidation, but it is possible the lenders could try to negotiate for part of the proceeds to pay down their loans, some of these people said."

Takeaway: Still a lot of controversy surrounding the best way to handle the company's current real estate position.  This is what we had to say about the announcement back inMarch, "The reality is that RSH probably does not need to close stores. It needs to close Radio Shack. The store banner is hardly an asset, nor is the fact that it is the destination for replacement transistors, extension cords, cheap electronic toys, and mobile phones (which is underperforming). The greatest asset, in our opinion, is actually the 4,000+ US store locations. Think about it. If you wanted to build a small format retail concept in any other category -- apparel, sporting goods, or heck, even e-tail showrooms, it would take at least a decade to build up that kind of scale. If current management (who is quite good -- especially for Radio Shack) can pull off this turnaround, then we'll give 'em all the credit in the world. But we think a better answer lies in a different strategic direction."

HD - Home Depot Lumbers Into E-Commerce


  • "This year, the home-improvement chain will open two distribution centers and just one store. The move is a stark signal for an overbuilt industry that may be witnessing a permanent drop in shopper traffic, even in the middle of a housing recovery that is boosting sales."
  • "Online sales accounted for only 3.5% of the company's $78.8 billion of sales last year. But they are growing faster than the rest, so the fix-it chain is investing $1.5 billion this year for supply chain and technology improvements to link its stores and Internet business, including the new online fulfillment centers."
  • "Still, Mr. Blake is firm that adding new stores isn't the answer. 'When we get to the point where we're all in a room and we can't think of anything to invest in the business to make it better, then you would say, let's build some more stores,' he said."

Takeaway: Store growth may not be the answer to grow revenues, but we're not sure that dot.com is the right answer at least for HD as it exists today. Many of its categories just don't translate to e-commerce. A bigger web presence for HD likely means more acquisitions a la the blinds.com deal back in January.



APP - American Apparel Meets Listing Requirement


  • "American Apparel Inc. is no longer facing a delisting threat from the NYSE MKT exchange."
  • "The Los Angeles-based vertical retailer said Wednesday that it had received a letter from the exchange saying the firm has resolved a listing deficiency involving companies with 'impaired operations,' which first drew the exchange’s attention in late February."


URBN - Trish Donnelly Said Headed to Urban Outfitters


  • "Trish Donnelly, president of Steven Alan, is believed headed to Urban Outfitters Inc. An announcement could be made soon, sources said. Donnelly, the sources said, will be president of Urban Outfitters North America, reporting to Ted Marlow, chief executive of the Urban Outfitters brand."
  • "Prior to Steven Alan, Donnelly was an executive vice president at J. Crew Group. Earlier, she worked at Cole Haan and Ralph Lauren."


SPWH - Sportsman's Warehouse prices IPO at $9.50, below the range


  • "Sportsman's Warehouse, the largest outdoor sporting goods specialty retailer in the Western US with 49 stores, raised $119 million by offering 12.5 million shares at $9.50, below the range of $11 to $13. Sportsman's Warehouse plans to list on the NASDAQ under the symbol SPWH."


DSW - DSW Inc. Announces New Chief Financial Officer


  • "DSW Inc., a leading branded footwear and accessories retailer, announced the appointment of Mary Meixelsperger as Chief Financial Officer effective May 1. Ms. Meixelsperger replaces Douglas Probst, who is retiring from DSW Inc. on the same day."
  • "Ms. Meixelsperger joins DSW Inc. from Shopko Stores, a regional discount store chain, where she held the roles of Chief Financial Officer, Controller and Treasurer for the last nine years. Prior to Shopko, Ms. Meixelsperger was the Chief Financial Officer for two non-profit organizations between 1 and was the Chief Financial Officer for Worldmark Group, a private equity firm between 1."




  • "Vince Holding Corp...today announced that its Board of Directors (the "Board") has appointed Eugenia Ulasewicz  as a new director, effective immediately.  This appointment will bring the total number of directors to seven.  Ms. Ulasewicz joins the Board as one of the three outside directors, along with Robert A. Bowman and Jerome Griffith, who were elected to the Board in connection with Vince's initial public offering."
  • "Prior to her retirement in March 2013, Ms. Ulasewicz was President of the Americas division of Burberry Group PLC , responsible for the US, Canada, Central and South America. Ms. Ulasewicz joined Burberry in 1998 and became a member of its executive committee in 2006.  Previously, Ms. Ulasewicz held positions of increasing responsibility with Bloomingdales, Galeries Lafayette and Saks, Inc. She currently serves as a director of Signet Jewelers Limited and Bunzl plc."

Alec Richards