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AUGUST 28, 2009


  • With all tax-free holidays and 90% of its markets now back to school, SCVL is seeing considerable strength in its August same store sales trends. The company is running up 11% for the month with about 5% of the growth attributable to the calendar shift. As a result of the unexpected upside, the company is now forecasting a positive quarterly same store sales increase for the first time in 12 quarters. The athletic category is showing the strongest gains, while all departments are tracking positively.
  • With Aeropostale emphasizing logos on its merchandise and Abercrombie toning the logos down, where does American Eagle stand? It turns out that AEO management believes the customer is looking for a cleaner look with less oversized logos and blown-up graphics. Look for AEO’s assortment to have a cleaner look in knits and less pronounced branded graphics over the next season and into Spring ’10.
  • There is one clear trend that all footwear retailers are noting, and that is early signs of strength in the boot category. Retailers at all price points, from off-price to full-line department stores have noted that boots are setting up to be a key category over the Fall season. Importantly, boots carry higher ASP’s which should bode well for the industry.
  • In effort to keep inventory closely aligned with sales trends, Genesco’s Journey’s division increased its promotional cadence during 2Q. The promotional stance is also expected to remain in place through the back-to-school season. Additionally, management noted that certain canvas and core skate brands are becoming more widely distributed which is also a factor driving the promotional activity. The company went on to note, that there are no new compelling fashion trends, products, or brands that currently have the ability to generate meaningful incremental demand.
  • In one of the most substantial examples of trading down, Fred’s reported that its private label consumables business increased by 515 bps in the quarter vs. last year. The huge jump in owned-brand sales is a clear sign that the consumer remains extremely price sensitive.
  • On the company’s quarterly conference call, J Crew’s CFO was quick to point out that the much better than expected gross margin performance was due to a slightly better topline and efficient inventory management rather than from sourcing cost reductions. The company still expects that product cost reductions in the range of 3-5% will be realized over the second half of the year.
  • Demonstrating the power of the shift to online marketing and ecommerce and away from traditional paper catalogs, J Crew posted a 6% increase in its direct business while simultaneously decreasing its catalog circulation by 36%. Plans call for another 20% reduction over the back half of the year, which at this point appears to be conservative given the success of the initiative so far. As an offset to the traditional catalog, the company is testing niche mailings that are more targeted from a merchandising and customer segmentation viewpoint.


-Thailand to develop eco-friendly fibers - To cope with the ever growing environmental concern, the  development of eco-friendly fibers and functional textiles will be the future of Thai textile manufacturers, said Executive Director of the Thailand Textile Institute (THTI) Virat Tandaechanurat.This year, the Institute has conducted research on functional textile and natural fibers with funding from the Office of Industrial Economics. Two of the fibers including banana fiber and coconut charcoal blended with polyester fiber have won the Design Excellence Award 2009. Tandaechanurat said, "The new fiber could also offer cost savings as Thailand produces very less cotton but imports almost 400,000 tons of cotton and silk per year at a cost of almost 50 billion baht and ninety% of cotton used in the country is imported and this way, we will be using plants instead of petrochemicals." <fashionnetasia.com>

-Bangladesh's T-Shirts exports to Germany increasing - Bangladesh's T-Shirts exports to Germany is increasing every year thus gaining market share, according to the Export Promotion Bureau of Bangladesh (EPB). The country currently ranks third among exporters of T-Shirts to Germany behind the combined sales of EU countries and Turkey. Bangladesh shipped knitwear worth US $1.34 billion and woven garments totaling to $802 million in the previous fiscal (2008-09). Bangladeshi garment exporters expect shipments of apparels and volumes to improve in the rest of 2009, since Germany is one of the few countries which has been able to overcome from the economic crisis in the H2. Global market share of Bangladesh in terms of T-shirt shipments to Germany reached 18.47% in 2008, up from 15.33% in 2007 as compared to Turkey's share of 24.06% in 2008 and 26.36% in 2007. <fashionnetasia.com>

-Indian Export Federation demands lower export taxes - Federation of Indian Export Organisations (FIEO) has urged the country's Ministry of Commerce to offer reduce taxes incurred to its exports as a measure to increase price competitiveness. The country's exports are already burdened with the incidence of States and local levies of which in some States can be as high as 5-6% of the FOB value. FIEO is hoping that the Foreign Trade Policy should therefore announce a new scheme to rebate State and local levies on an average basis. The Foreign Trade Policy provides incentives through schemes such as Market Linked Product Scheme where benefit ranges between 1.25% to 5%. Due to very low benefit under few schemes, exporters are reluctant to benefit from it. The export benefit under all these schemes should be a minimum of 3.75% and all such schemes may be extended until 31 March 2012. <fashionnetasia.com>

-Up to 10,000 retail stores are expected to close by the end of the year - As many as 10,000 stores are expected to close by the end of this year, according to a retail report by Grant Thornton LLP. Retail distress advisers at the company’s Corporate Advisory and Restructuring Services division in New York focused in the report on what retailers can do to improve their chances of survival, specifically through financial management and process improvement. Retailers faced their biggest declines at the end of last year, Marti Kopacz, Grant Thornton’s CARS national managing principal, said in a Tuesday release. More than halfway through 2009, consumers still aren’t in the mood to open up their wallets. “Falling sales hit all regions of the country and nearly all retail sectors, challenging stores and pushing many to the brink of failure,” Kopacz said. “Either retailers are contemplating bankruptcy, have already declared it or are announcing significant reductions.” <bizjournals.com>

-Umbro is the United Soccer Leagues official sponsor - Nike Inc. said it has sold its majority ownership stake in the United Soccer Leagues to Atlanta-based NuRock Soccer Holdings LLC. In conjunction with the deal, Nike said it has reached a long-term agreement with the USL in which its Umbro brand will be the league's official sponsor and exclusive ball supplier.  <sportsonesource.com>

-Sears.com attack may have taught other e-commerce sites a lesson - Outsiders altered pages on Sears.com to make it seem like the retailer sold products for cooking babies. They took advantage of the way Sears cached pages for fast loading. Other sites may have changed their caching techniques as a result. <internetretailer.com>

-Sears to open beauty departments in 13 select Sears mall locations - Beauty departments will soon debut in 13 select Sears mall locations throughout Chicago, Los Angeles and New York. Grand openings will take place this month through September. Sears Beauty will offer shoppers a wide variety of cosmetics, skin care, bath and body and natural and fragrance products from brands such as L'Oreal, Maybelline, CoverGirl and Calvin Klein. The retailer is also the exclusive U.S. partner of France-based botanical products brand Yves Rocher. "Sears Beauty is dedicated to providing a whole new way of accessing beauty products in a personalized and approachable way," says Andrea Goldner, Sears Beauty's divisional merchandise manager. "Our goal is to help customers obtain a mix of beauty products, both in store and online, that meet their individual needs and complete their head-to-toe look." The grand openings will feature special deals, including a free cosmetic bag and brush set with any $25 cosmetics, fragrance or bath purchase, as well as a $10 Sears reward card with any $50 beauty purchase. <licensemag.com>

-Ben Sherman decides to re-continue footwear - Shortly after announcing the discontinuation of its footwear, Ben Sherman has announced it will remain in the category with a new licensing partner: London-based Hudson Shoes.“Since deciding to cease our in-house footwear business, we have had strong interest from most of the key players in the footwear sector to take the Ben Sherman footwear license,” said Ben Sherman CEO Miles Gray in a statement. “However our clear preference has been to establish a partnership with Hudson, who we feel tick all the boxes in terms of footwear expertise and full understanding of the Ben Sherman brand and its potential, and we really look forward to working with the Hudson team.” <wwd.com/footwear-news>

-Wolverine World Wide awards Australian company with rights to distribute Merrell internationally - The Australian company, RCG Corporation has been awarded the Australian rights to distribute the Merrell brand of outdoor, comfort, active lifestyle, performance footwear and apparel under an agreement with Wolverine World Wide, Inc., the owner of Merrell. The agreement is effective from 1 January, 2010. <sportsonesource.com>

-UK discount-happy department stores pressure independent retailers - Independent retailers are facing another battering from the discount-happy department stores this weekend, after hemorrhaging 0.6% – equivalent to £4.3m of sales – worth of market share by value in the three months to June 21. Debenhams ramped up its 70%-off summer Sale to include more lines and deeper discounts as well as money off new season autumn ranges ahead of the bank holiday weekend, while Marks & Spencer also launched a Sale this week, with discounts of up to 50% in an attempt to capture more holiday weekend spend. According to figures from retail research firm TNS WorldPanel Fashion, independent retailers saw their share by value fall 0.6% to 7% over the 12 weeks to June 21. The total value of the market fell 2% to £7.1bn. Womenswear sales at clothing indies were particularly hard hit, with share down 1.4% to 6.1%. This was against flat sales across the entire women’s clothing and footwear market, at £4.1bn. TNS blamed the erosion of womenswear sales at indies almost entirely on the recent promotional activity within the department store market. Key indie competitors such as Debenhams and House of Fraser have run almost continual promotions over the spring 09 season, while John Lewis has price-matched its rivals. <drapersonline.com>

-L'Oreal Jumps as Better-Than-Estimated Results Prompt Analyst Upgrades - L’Oreal SA, the world’s largest cosmetics maker, rose the most in nine months in Paris trading after posting a smaller-than-estimated earnings decline and forecasting a recovery, prompting upgrades from three banks. <bloomberg.com>

-Carrefour SA, the world’s second-largest retailer behind Wal-Mart Stores Inc., swung to a loss in the first half of 2009 - But the company, which is overhauling its operations in a bid to stay competitive, reiterated its full-year outlook, saying that it’s on track to meet its 2009 objectives. <wwd.com/business-news>

-Hermès International blamed poor returns on financial investments and currency fluctuations - The French leather goods and fashion firm reiterated its target of steady sales for the full year at constant exchange rates and a "slight contraction" in current operating income. Operating income fell 2%, as sales in the half rose 7.6%. Declines in orders for watches, perfume and tableware and ongoing sluggishness in Japan. <wwd.com/business-news>

-The Hervé Léger by Max Azria retail network is growing - BCBG Max Azria Group is expanding the label’s reach with store openings in London, Singapore and Dallas, and a relocation of its Madison Avenue unit in Manhattan. Max Azria, designer and chief executive officer, said the recession presented opportunities for growth.  <wwd.com/retail-news>

-More advertisers have pulled out of Fox News’ Glenn Beck Program, bringing the tally to 46 - The list includes Applebee’s, Bank of America, Bell & Howell, DirecTV, General Mills, Kraft, Regions Financial Corporation, SAM (Store and Move), Travelers Insurance and Vonage, per to the group's press release. Travelers Insurance, Bell & Howell and DirecTV were already on a “do not air” list for the show, though their ads appeared during the show anyway, according to the release. According to Fox News Channel's rep, however, Bank of America never advertised on the Glenn Beck Program, and Bell & Howell is not a Fox advertiser. The rep didn't give further details, but provided a statement: "The advertisers referenced have all moved their spots from Beck to other programs on the network so there has been no revenue lost." Earlier this week, Color of Change reported that 36 advertisers were pulling ads, including Clorox, Procter & Gamble and AT&T. James Rucker, a co-founder and executive director, told Brandweek that the group is closely monitoring which advertisers will stick with the Fox News after their contracts are up. Geico, LexisNexis' Lawyers.com, Progressive Insurance and SC Johnson were among the first advertisers to say that they would stop airing ads, following Beck's controversial broadcast on July 28 in which he called the president a “racist.”  <brandweek.com>