Retail Callouts (6/4): NKE, WMT, TGT, AMZN

Takeaway: NKE files patent for form fitting shoe. WMT beats TGT to market on chip & pin. New Indian PM could be lifting FDI restraints

EVENTS TO WATCH

 

WEDNESDAY (6/4)

  • FIVE - Earnings Call: 4:30pm

 

THURSDAY (6/5)

  • PVH - Earnings Call: 9:00am
  • VNCE - Earnings Call: 9:00am

 

COMPANY NEWS

 

NKE - NKE Files Patent for Form Fitting Shoe

(http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=22&f=G&l=50&co1=AND&d=PTXT&s1=Nike.ASNM.&OS=AN/Nike&RS=AN/Nike)

 

  • "A footwear customization kit is disclosed. The kit comprises a container including an article of footwear, a stand, a steaming bag and a set of instructions. The article of footwear includes a customizable portion that can be deformed when heated. The stand and the steaming bag can be used to heat the article of footwear in a steam environment. The stand includes a base portion and a footwear engaging portion. The stand can also include a detachable portion configured to engage the base portion in one position and the footwear engaging portion in another position."

 

Retail Callouts (6/4): NKE, WMT, TGT, AMZN - chart1 6 4

 

Takeaway: NKE leads the footwear category in innovation and the margin isn't even close. We're not as excited for a form fitting shoe as we are for the in-store FlyKnit customizer, but it's another arrow in NKE's quiver that differentiates it from its competition. It's much easier to take price when its associated with technical innovation. Even if the wholesale partners (FL, FINL, DKS, etc…) don't initially carry this technology, it is something that Nike can wave in front of them as an incentive to strengthen its leverage over these retailers.

 

WMT - Sam's Club to Issue MasterCard-Branded Card With Security Chip

(http://online.wsj.com/articles/sams-club-to-issue-mastercard-branded-card-with-security-chip-1401877261)

 

  • "Sam's Club...said it would unveil a new credit card that features chip-enabled security technology."
  • "The new card—co-branded with MasterCard Inc. and issued by GE Capital Retail Bank—represents the first active adoption of the technology by a mass retailer, Sam's Club said."
  • "The new card, along with a new rewards program linked to it, will become available June 23, Sam's Club said."

 

Takeaway: Talk about a punch in the gut for TGT. Target announced its intent to roll out chip and pin enabled cards this year, but gets beat to market by WMT. This is as much about PR as it is about security. TGT needs to prove that it's going above and beyond in the security department to win back its customers, but is unable to move quick enough in order to win the PR battle.

 

AMZN, WMT - Exclusive: India likely to ease restrictions for foreign online retailers next month

(http://www.reuters.com/article/2014/06/04/us-india-retail-idUSKBN0EF0V920140604?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637)

 

  • "India could allow global online retailers such as Amazon.com Inc to sell their own products as early as next month, removing restrictions that could boost competition in one of the world's biggest, and most price-sensitive, retail markets."
  • "The decision, which is likely to be announced in the budget, is one of the first tangible signs of economic reform by the business-friendly government of Prime Minister Narendra Modi, who was sworn in 10 days ago."
  • "The move is also likely to allow the government to circumvent political opposition to opening up India's $500 billion retail sector to global retail giants such as Wal-Mart Stores Inc."

 

Takeaway: New PM and the first signs that some of the FDI restraints may be lifted.

 

OTHER NEWS

 

DECK - Teva Strikes Licensing Deal With BBC International

(http://www.wwd.com/footwear-news/business/teva-strikes-licensing-deal-with-bbc-international-7708385)

 

  • "Deckers Outdoor Corp.’s Teva brand has inked a licensing deal with footwear firm BBC International to distribute the label’s children’swholesale business in the U.S."
  • "The partnership will commence this month, with the transition expected to impact the Teva’s spring ’15 product offering."

 

BOSS - Mark Brashear Exits Hugo Boss

(http://www.wwd.com/business-news/human-resources/mark-brashear-exits-hugo-boss-7708164)

 

  • "Hugo Boss said Tuesday that Mark Brashear, chairman and chief executive officer of the brand in the Americas, has left the company. Claus-Dietrich Lahrs, ceo of the Metzingen, Germany-based company, will oversee the Americas until a successor is named."
  • "Brashear joined Hugo Boss to oversee the Americas in 2009. Before that, he was with Nordstrom for nearly 23 years, from 1985 to 2008, where he was executive vice president. From 2001 to 2007, he was chief executive officer of Façonnable, which was owned by Nordstrom during those years. He could not be reached for comment Tuesday."

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