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Takeaway: Another big reading from ICSC, PLCE adds Vill from KATE, HD breach could be biggest yet, Rakuten coughs up $1bil for Ebates


Wenesday (9/10)

  • VRA - Earnings Call: 9:30am
  • FIVE - Earnings Call: 4:30pm
  • WTSL - Earnings Call: 4:30pm
  • RH - Earnings Call: 5:00pm

Thursday (9/11)

  • LULU - Earnings Call: 9:00am
  • KR - Earnings Call: 10:00am
  • ULTA - Earnings Call: 5:00pm


Takeaway: Another big reading from the ICSC up 4% YY - with a slight deceleration on the 1yr and 2yr trend line. Looking at the change in growth rate by calendar quarter: 1Q down 85bps, 2Q up 48bps, and 3Q to date up 163bps. We'll reiterate what we said last week. "US retailers should be killing it in this kind of environment. Most are. But for companies that but up questionable quality numbers (like KSS) but get rewarded anyway, we'd simply ask what they'll look like when this strength ends?"

Retail Callouts (9/9): PLCE, KATE, HD, TGT, FRAN, JCP, COH, LULU, WMT - 9 9 chart1

Retail Callouts (9/9): PLCE, KATE, HD, TGT, FRAN, JCP, COH, LULU, WMT - 9 9 chart2


PLCE, KATE - The Children's Place taps former Kate Spade exec as group VP, finance


  • "The Children's Place has appointed Robert Vill as group VP of finance. He will report to Michael Scarpa, chief operating officer and CFO."


Takeaway: This is a big win for PLCE. Some people know Vill as the Investor Relations contact at LIZ/FNP/KATE. But the reality is that he played the CFO role in large part since Mike Scarpa left what was then Liz Claiborne in 2008.  It's natural for the two to connect again for many reasons. But this is not the role we expected to see Vill take. He has always been extremely tight with Scarpa, but was also invaluable to Bill McComb throughout the period he transformed LIZ into KATE. It is only a matter of time before McComb lands another CEO role, and we fully expected Vill to be his CFO. Guess not.


HD, TGT - Home Depot Data Breach Could Be the Largest Yet


  • "Home Depot confirmed on Monday that hackers had broken into its in-store payments systems, in what could be the largest known breach of a retail company’s computer network."
  • "The retailer said the exact number of customers affected was still not clear. But a person briefed on the investigation said the total number of credit card numbers stolen at Home Depot could top 60 million. By comparison, the breach last year at Target, the largest known attack to date, affected 40 million cardholders."


Takeaway: We still think that the key takeaway is that this breach is so big, but so few people seem to care relative to past breaches. Sadly enough, the consumer is getting used to data security lapses. They may be more forgiving for past offenders as well, including Target.


Rakuten to Buy Ebates in Japan’s Biggest E-Commerce Deal


  • "Rakuten Inc. agreed to buy U.S. rebates website Ebates Inc. in Japan’s largest e-commerce deal as the operator of the country’s biggest online mall seeks overseas growth through acquisitions."
  • "Rakuten will pay $1 billion in cash for all of Ebates, it said in a filing to the Tokyo Stock Exchange today. San Francisco-based Ebates offers cash rebates to customers who buy products ranging from laptops to lipsticks from the website’s retail partners."
  • "Rakuten’s billionaire chairman Hiroshi Mikitani is betting the purchase will help the Tokyo-based company push its global e-commerce strategy. Rakuten has also been plowing cash into technologies such as mobile applications and online video as it seeks to add to its online marketplace business."


Takeaway: No direct public company implications here, but the simple fact that a Japanese company is buying an early cycle non-asset-based US e-tail startup for $1bn in cash is pretty much huge any way we slice it. In order of magnitude, this is like when Amazon bought Zappos for $928mm six years ago -- near the top of the last cycle.  At least Zappos had a brand. And a loyal customer base. And warehouses. And suppliers. And revenue. 




FRAN - 2Q14 Earnings

Retail Callouts (9/9): PLCE, KATE, HD, TGT, FRAN, JCP, COH, LULU, WMT - 9 9 chart3


JCP - J. C. Penney Commences Tender Offers for 6.875% Medium-Term Notes due 2015, 7.65% Debentures due 2016 and 7.95% Debentures due 2017


  • "J. C. Penney Company, Inc. announced today the commencement of cash tender offers  by J. C. Penney to purchase up to $300 million aggregate principal amount of the three outstanding series of securities issued by JCP, and for which the Company is co-obligor, described in the table below, except that with respect to the 7.95% Debentures due 2017, J. C. Penney is only offering to purchase up to $100 million principal amount."



  • "Coach, Inc. ... today announced the appointment of Gebhard Rainer, as President and Chief Operating Officer, effective September 29, 2014."
  • "Mr. Rainer joins Coach from Hyatt Hotels Corporation, where he most recently held the position of Executive Vice President and Chief Financial Officer. Previously, Mr. Rainer served as Managing Director for Hyatt International Europe, Africa and Middle East (EAME) LLC from January 2007 to August 2012 overseeing all aspects of the company’s business in the region. Mr. Rainer has more than 30 years of experience in progressively more senior operating and finance roles, and has extensive international experience, having lived in the Caribbean, the Middle East, Eastern Europe, Western Europe, and the United States."


LULU - New Lululemon Flagship Signals Identity Crisis for Embattled Retailer


  • "The recent unveiling of the Lululemon flagship store in downtown Vancouver offers a glimpse into what the future may hold for the embattled retailer. Lululemon has been under intense scrutiny since a series of blunders have hamstrung the brand’s image and damaged its share price. But it's what's missing from the flagship store that may worry investors: the essence of the Lululemon brand."


WMT, TGT - Wal-Mart to Kill 'Express' Store Brand: Report


  • "Wal-mart U.S. will rebrand all its Express stores to Neighborhood Markets in an effort to streamline its retail offer, according to a report in the Arkansas Democrat-Gazette."
  • "Citing an internal company memo from Wal-mart U.S.’ chief development officer, the newspaper reported that the Express moniker will be eliminated, with all new small stores in the future called Neighborhood Markets. The 21 existing Express stores will be converted to the Neighborhood Market banner in coming months"

Twitter's 'Buy' Button Debuts With Burberry


  • "The social network, which boasts 271 million average monthly users, on Monday unveiled a 'buy' button that allows users to buy directly from a tweet. The move is an attempt by the social network to generate another revenue stream and satisfy the ever-hungry Wall Street for ongoing growth."

WAG - Walgreens Appoints Barry Rosenstein of JANA Partners LLC to Board of Directors As Company Progresses Toward Alliance Boots Merger


  • "Walgreens announced the appointment of Barry Rosenstein and a second new director to be named to its board of directors as the company continues moving forward to complete its merger with Alliance Boots GmbH."