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Pleasure's Hook

“Do not bite at the bait of pleasure, till you know there is no hook beneath it.”
-Thomas Jefferson
Among other things, Thomas Jefferson was an archaeologist, an architect, and a horticulturalist. He was a Macro Man, of sorts, who subscribed to a multi-factor model of self education. Per Wikipedia, “he idealized the independent yeoman farmer, distrusted cities and financiers, and favored states’ rights and a strictly limited federal government.”
As the 3rd President of the United States, Jefferson’s writings certainly left an impression on me. I think the man left one on a lot of other people too. Whether his vision of America fits into today’s Gong Show of American style Financial leadership is not clear. That’s sad.
When I write about the US Federal Reserve being as politicized as it has ever been, or when I chirp about the Hank Paulsonites at the US Treasury, I am not being politically partisan (remember, I am a Canadian hockey player!). When it comes to the perceived financial wisdom of this nation’s “leaders”, its not about Bush or Obama. It’s not about Republicans versus Democrats either. It’s about competence. It’s about being right.
Is it right to value a country’s economic health by measure of her stock market? Is it right to measure it by the value of her currency? Is it right to use one measurement and not the other?
In 2009, whether you came to understand the inverse correlation between America’s currency and everything priced in that currency or not, you are now forced to pay attention. From a macro perspective, this call makes or breaks your year. As the Buck Burned, now we know that US Debtors, Bankers, and Politicians got paid. Eventually, investors taking advantage of this twice in a 40 year US Dollar Sale did too. All the while, bullish or bearish, we all knew there was a hook.
What’s the hook? It’s Pleasure’s. Unless you are a reptile, it’s stored nicely right there in your thick mammal neocortex. When prices of things you own go up, you feel good. When those prices go down, you don’t. That’s it.
Now that the US Government has completely crashed America’s currency, you know the hook was America losing her credibility as the long standing fiduciary of the Global Financial System. How does that feel? Or does anyone’s limbic system feel that?
The headlines coming out of today’s G-20 meetings in Pittsburgh are going to be what the Germans, Chinese, and Russians make them. As I sit here and watch the replay of Timmy Geithner’s remarks, I am simply saddened. America’s voice of thought leadership in financial matters has been compromised and diluted. That’s the hook.
Pleasure’s Hook is the US Dollar. Since 2:45PM EST on Wednesday, post Ben Bernanke pandering to a Japanese style rate of return (ZERO), the US Dollar marked and rallied +1.5% from her YTD low. Over that same time frame, the SP500 has corrected -2.5%. That’s the hook.
To be clear, the US Dollar remains broken, across all 3 of my investment durations, and it will continue to be unless it can find some level of hope coming out of the G-20 that stops the Chinese from selling their credits. China is now The Creditor. America is the Debtor. That’s the hook.
Hope is not an investment process, so don’t bet on my selling everything I own (that’s priced in US Dollars), until the math tells me that the US Dollar has bottomed. This morning, after the Squirrel Hunter Secretary of the Treasury proclaimed his mystery of faith: “We expect, as I think countries expect around the world, the dollar to retain that position for a very long time”, guess what the Buck did? You got it – it Burned. It’s embarrassing.
Having met with plenty a Chinese business person, I will assure you of this. They will do a lot of 3 things in the next 3 days into and out of the G-20: 1. Smile, 2. Nod, and 3. Sell.
Sell? Sell what? The Chinese are a net seller of US Treasuries and US Dollars. This is something that anyone who isn’t paid to be willfully blind to the actual data knows. This is not good, but this is also not new. This Chinese stopped buying in Q1. They started selling in Q2. Since. Since March, the US Dollar has lost -15% of her value.
With the US Dollar Index trading down another -0.23% so far this morning (Germany’s Merkel comments pending), here are my levels on the US Dollar Risk Management:
1.      Immediate term support at the YTD low of $75.81. Immediate term resistance at my TRADE line = $77.53

2.      Intermediate term TREND resistance= $78.91

3.      Long term TAIL resistance = $82.79

So what do you do with these lines? Well, I wait and watch for the real-time US Dollar price to move around them. Then I manage risk accordingly. In hockey, my Dad called this “Read and React.” When the USD goes up like it did yesterday (+0.76%), I cover and buy stuff. When the USD goes down, I short and sell stuff. Some people call that trading. I call it Risk Management of my invested exposure. Johnny Keynes himself was a currency trader don’t forget.
Burning Man, US Dollar style, has plenty of unintended consequences. As the Japanese Yen hits new intermediate term highs (at 90.45 this morning versus USD), Japan’s bureaucrat bankers are managing a little risk for themselves. Some in Asia are calling this “repatriation.” Having been the poster child of currency carry trading abuse for lost decades, if anyone understands what happens to foreign fund flows into your country when you debauch your currency, its Japan!
Nomura, Japan’s largest banking/brokerage outfit, is ah, NO-MORa this morning! In one of the largest liquidity raises I have seen in a long long time, the Japanese bankers issued 800 MILLION shares (30% of the outstanding) to whatever lost soul had it in them to buy these shares last night. Nomura’s stock dropped -16% on the “deal”, leading Japan’s Nikkei to a -2.6% smack-down close overnight.
I know what John Mack at Morgan Stanley thinks about all of this. Check out the risk management of his resume as of late and, while you are at it, don’t forget that MS is part Japanese now too!
I wonder what Thomas Jefferson would think of Japanese style banking meeting the American kind that he never thought he’d see…
My immediate term risk/reward levels for the SP500 are 1045 (TRADE line support) and 1061 resistance. I’ll be selling into the strength associated with Pleasure’s Hook, at a price.
Have a great weekend with your families,



EWG – iShares Germany
Chancellor Merkel has shown leadership in the economic downturn, from a measured stimulus package and balanced budget to timely incentives such as the auto rebate program. We believe that Germany’s powerful manufacturing capacity remains a primary structural advantage; with fundamentals improving in a low CPI/interest rate environment, we expect slow but steady economic improvement from Europe’s largest economy. Merkel looks to be in the driver’s seat for re-election on September 27th, while her coalition partners are less certain.

CAF – Morgan Stanley China Fund A closed-end fund providing exposure to the Shanghai A share market, we use CAF tactically to ride the more volatile domestic equity market instead of the shares listed in Hong Kong. To date the Chinese have shown leadership and a proactive response to the global recession, and now their number one priority is to offset contracting external demand with domestic growth. Although this process will inevitably come at a steep cost, we still see this as the best catalyst for economic growth globally and are long going into the celebration of the 60th Anniversary of the People’s Republic.

GLD – SPDR Gold We bought back our long standing bullish position on gold on a down day on 9/14 with the threat of US centric stagflation heightening.   

XLV – SPDR Healthcare We’re finally getting the correction we’ve been calling for in Healthcare. It’s a good one to buy into. Our Healthcare sector head Tom Tobin remains bullish on fading the “public plan” at a price.

CYB – WisdomTree Dreyfus Chinese Yuan
The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP – iShares TIPS The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield. We believe that future inflation expectations are currently mispriced and that TIPS are a efficient way to own yield on an inflation protected basis, especially in the context of our re-flation thesis.


LQD – iShares Corporate Bonds
Corporate bonds have had a huge move off their 2008 lows and we expect with the eventual rising of interest rates that bonds will give some of that move back. Shorting ahead of Q4 cost of capital heightening as access to capital tightens.

DIA  – Diamonds Trust We shorted the Dow on 9/3.  In the US, we want to be long the Nasdaq (liquidity) and short the Dow (financial leverage).

EWJ – iShares Japan While a sweeping victory for the Democratic Party of Japan has ended over 50 years of rule by the LDP bringing some hope to voters; the new leadership  appears, if anything, to have a less developed recovery plan than their predecessors. We view Japan as something of a Ponzi Economy -with a population maintaining very high savings rate whose nest eggs allow the government to borrow at ultra low interest levels in order to execute stimulus programs designed to encourage people to save less. This cycle of internal public debt accumulation (now hovering at close to 200% of GDP) is anchored to a vicious demographic curve that leaves the Japanese economy in the long-term position of a man treading water with a bowling ball in his hands.

SHY – iShares 1-3 Year Treasury Bonds  If you pull up a three year chart of 2-Year Treasuries you'll see the massive macro Trend of interest rates starting to move in the opposite direction. We call this chart the "Queen Mary" and its new-found positive slope means that America's cost of capital will start to go up, implying that access to capital will tighten. Yields are going to continue to make higher-highs and higher lows until consensus gets realistic.


COMM-CAP IS HERE, WHAT DOES IT MEAN? Destination-macau.com

The commission cap, according to DM, will help the concessionaires become more profitable.  There is a valid fear that side-betting could become more prevalent but overall the cap should result in EBITDA growth for the operators.  While the authorities have made it clear that the cap applies to all forms of compensation, cash and non-cash, it is very difficult to measure the non-cash side of the business let alone police it.


DM sees credit as the most important factor for players; they will go wherever they can get the longest credit line.  Having deep pockets and having good debt-collecting agents could now be more crucial to concessionaires’ profitability than ever.  SJM and Galaxy shot up when the commission cap news emerged this week.  Wynn could benefit from the return of customers previously lost due to more aggressive commissions elsewhere. 




SJM: WHAT’S WITH ANOTHER HK$2BN? Destination-macau.com

SJM has announced its intention to raise HK$2bn from a convertible bond.  With visitation and revenue numbers looking healthy, commission caps coming into place, and the 60th Anniversary of modern China approaching, valuations are being pushed up.  DM speculates that the money will be used either to play the stock market or to fund credit lines for junkets. 

The five-year bond will have a zero coupon and be convertible to SJM stock at a price of HK$2.25 from December 8.  Today’s share price was HK$4.35.




SJM: THE ONLY STOCK TO BUY? Destination-macau.com

DM cites an analyst’s warning that Macau gaming stocks are becoming inflated and becoming a bubble as overcapacity threatens to drive down ROIC and over-excitement about visa-easing and commission caps push share prices up rapidly.  The one stock that is recommended by this commentator is SJM.  The reasons include, dominant market share, superior ROIC, right market-segment focus, improving profitability and a superior balance sheet. The source also claims that SJM is trading at a discount compared to its peers.




WYNN PUTS ON A SHOW Destination-macau.com

Steve Wynn held a press conference during the week prior to Wynn Macau’s IPO on the Hong Kong stock exchange.  When asked if he feared losing direct-VIP clients to the Singapore resorts when they open early next year, his response was that he has Linda Chen and the don’t (fear losing business to Singapore).  DM exalts Wynn and Chen’s track record in the VIP baccarat business and believe they will continue to outperform in that area when Singapore is open. 


Regarding the stock price, some commentators are claiming that once the stock starts trading at HK$10, much of the upside is priced in.




L’ARC OPENS FOR ANGELA Destination-macau.com

L’Arc has had a strong few days since opening.  The mass floor is said to have done quite well. It remains to be seen how the business will far when the SJM new business operations team hand over to the L’Arc team.




Japanese August Trade data was released this morning, with export levels registering at a year-over-year decline of 36%. This is the 10th consecutive month in which exports have shown a decline of greater than 25% from the same month in the prior year.


There were some slender positive data points in the otherwise abysmal data, including Motor vehicle exports headed for China which turned positive on a year-over-year basis at 0.53%, although shipments to “The Client in total still declined by 27% over last August. At only slightly more than 5% of the total (greatly diminished) car shipments heading abroad, not enough cars are heading to China to offset the slack demand elsewhere and total vehicle exports came in at -49.8% Y/Y, a marginal sequential improvement after the seven prior months of levels lower than -50%.


We have maintained a short position in Japanese equities via EWJ since the first week of July, sticking to our conviction as the data emerging has continued to indicate nothing but stagnation and frustration for the land of the rising sun regardless of stimulus band aids concocted by the last administration (and with eth ones being proffered by the new government looking equally impotent).


Andrew Barber




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HOUSING – Getting Too Comfortable At Home

Today, the NAR reported that sales of existing homes dropped 2.7% month-over-month in August.  Consensus expectations were for home sales to rise 2% in August.


After last month’s bullish new home sales data, we had to take a step back and question the sustainability of the improving housing trends when most consumers continue to suffer.  Clearly, the one big sticking point continues to be high unemployment, which puts real consumer demand in question. 


The slowdown in August (which will likely continue into September) can be attributed to a couple of reasons.  First, we are past the home sales PEAK SEASON (for those consumers with “need based” moves).  Second, the NAR said “first-time” buyers purchased 30% of homes in August which remains unchanged from July.  To that end, it appears that the Government home-buyer stimulant is ending and having less of an impact on sales trends.   


Given the time it takes to buy a new home, it’s less likely that “first time” buyers are going to close in time to take advantage of the Government subsidy.  Therefore, as a % of total buyers, “first time” buyers are going to fall off rather significantly in the coming months. 


Howard Penney

Managing Director


HOUSING – Getting Too Comfortable At Home - a2


We are short the Pound


One of the mottos inscribed on the side of some Pound coins, “decus et tutamen” is a Latin phrase meaning: “an ornament and a safeguard”, a reference to the ridged edges that were developed in centuries past to prevent thieves from clipping tiny pieces of the valuable metal before passing the debased coin back into circulation. In the present, the coin of the realm has been debased by forces that will require more than clever minting techniques to correct.


The Pound Sterling initially collapsed in the vacuum leading up to and following the collapse of Lehman Brothers in September of 2008, and bottomed in late January; conversely the dollar began its burn in March of this year and currently teeters with lows not seen since the abolishment of the gold standard in 1971, except for those of mid ’08. On 9/22 we shorted the Pound via the etf FXB.


This year we’ve repeatedly discussed the imbedded financial leverage associated with the UK economy. Not only have we failed to see leadership from the likes of Brown and King to direct fiscal and monetary policy in a direction that could move the country out of recession, but also ballooning public debt—which currently stands at 13% of GDP (according to a Alistair Darling’s most recent budget statement)—worries us not only in the near term, but on the TAIL (3 years or less) as it should hover well over “acceptable” levels well into 2010 and 2011. Below we’ll discuss our fundamental view on the UK, which we shorted via the etf EWU on 9/9, and our rational for shorting the Pound.


Certainly the extent of the UK’s financial leverage (as opposed to its Western European peers) has prolonged the ability of its major financial institutions to recapitalize and restore confidence, including the ability to extend credit into the broader economy (from first time home owners to larger institutions) to get the economy moving.  As in the US, this process has been rocky and politicized, with pressure ultimately exerted on the banking community to ensure that credit trickled into the consumer markets. This easing may have stemmed the trajectory of the contraction, but did little to spark recovery: Q2 GDP figures saw a clear divergence with Germany and France improving +0.3% Q/Q while the UK contracted -0.7%.


While the cost of mortgages and loans have been reduced parallel to the BOE benchmark as it descended to its lowest level ever, 0.5%, broad fundamentals still appear anemic (despite some areas of measured improvement) and we believe they’ll contribute to the country’s ongoing underperformance. 


Consumer and business confidence measures for the island economy (not unlike the Eurozone) have improved over the last few months, especially on future expectations, yet there are a slew of data points and metrics that suggest the pain is not over. Unemployment continues to increase sequentially in the UK, not unlike some of its more diversified continental neighbors. Should it continue its upward trend in the next two quarters, which we expect, we’re likely to see erosion in sentiment that will likely carry over to broader fundamentals. Retail sales and housing have yet to yield a discernible trend in either direction over the year, yet should sentiment fade, spending, the housing market, and output could follow with a pullback.  UK inflation (CPI) currently stands at 1.6% in August Y/Y and although it’s come down on an annual basis over the last months, it is still well ahead of the Eurozone average of -0.2% in August. We think in the near-term that UK inflation has gotten ahead of growth and that in the intermediate term it will stay there.


Finally, it’s worth considering the components of GDP.  The UK economy is a net importer and from January to June 2009 registered the largest deficit of the 27-country EU, at -46.4 Billion EUR. With Investment and Consumer spending down, this leaves government spending as the sole component to generate growth. As we’ve noted above, the ballooning debt, with borrowing at 175 Billion Pounds this year, and a cocktail of “socialist” measures from Brown like raising the income tax on top earners (150,000+ Pounds) to 50% from 45%, shall hinder GDP performance. We think this TAIL risk has contributed to discontent with the Brown government and the underperformance of the FTSE against most global indices.


From a currency perspective, despite the low interest rate environment in Europe [BOE at 0.5% and ECB at 1.0%] both the Pound and Euro have outperformed the degraded US Dollar during its YTD descent.  We’ve made our thesis on “Burning the Buck” abundantly clear and the chart below helps illustrate the gains for currencies on the other side of the trade.  Versus the dollar the Pound is up +13.3% YTD, while the Euro has gained +6.4% in the same period.  In the Chart below, the BOE trade weighted Index reflects this pressure.  While the Pound is well off its 2008 levels versus the USD and Euro, affording cheaper cost for buyers of UK exported goods, we’ve yet to see a noticeable pick-up (with some notable exceptions) due to the poor competitive stance of many sectors of the country’s industrial sector.


Along Keith’s call for reflation to morph into inflation in Q4 in the US, with it we expect to see (literally or rhetorically) a boost in interest rates. Associated with a hike should be a stronger dollar, which we believe should depreciate the value of the Pound as it has moved significantly against the USD, but also versus the Euro (+5.4% YTD), despite a negative fundamental outlook in the UK. Price momentum dictated our call to short the Pound, yet we believe the fundamentals support our call.  



Matthew Hedrick





Jimmy Choo, Where are You?

Jimmy Choo, Where are You?

SEPTEMBER 24, 2009



TODAY’S CALL OUT: Jimmy Choo, Where are You?


As the fashionistas prepare for the arrival of Jimmy Choo’s at H&M this Fall, we suspect management is also awaiting some positive sales developments in the wake of disappointing 3Q results. This fast fashion retailer appears to be the victim of low inventory levels leaving an inability to drive revenues. August sales, which were the weakest for H&M since 2005, were clearly impacted by a lack of clearance/markdown inventory after the company’s “summer sale” left inventory levels too lean. As such, 3Q results missed both sales and profit expectations.


Despite a disappointing quarter, H&M is increasing its store expansion for the full year from 225 stores to 240 stores and announced the launch of an e-commerce platform for fall 2010 in the UK.  Regionally, sales were strong in Sweden, Norway, Germany, China, Japan, and Russia but weak in Spain, the US, and France.  Warm weather, pricing competition, and the recession were blamed for the weak sales.  Gross Margins improved 80 bps due to currency hedges (and likely lack of clearance!). 



Jimmy Choo, Where are You? - H MSGIMA


Jimmy Choo, Where are You? - H M Sales chart




Retail Trading Call-Outs:


Jimmy Choo, Where are You? - stock chart





Some Notable Call Outs


  • Despite solid same store sales growth of 5.4%, AutoZone continues to see discretionary product underperform within the merchandise mix. Sales growth, as has been the case for the past couple of quarters, continues to be driven by “maintenance” products. Items such as oil filters, wiper blades, and brake pads define this category and are seeing strength as consumers look to take care of their autos proactively in the difficult macro environment. From a regional standpoint same store sales were consistent throughout the country with no notable callouts.


  • With only a token $20 million worth of share repurchase activity in 2Q, Bed Bath and Beyond is likely setting up to put some of its $1.2 billion cash balance to work. The balance sheet remains debt free and square footage growth should remain close to 6% for the next year or so. This is all sets up nicely for the company to tap the $900 million remaining in authorization in the near-term. Of course management would never signal its plans for when they’ll be buying, but with interest rates near zero, the cash balance certainly has better uses.


  • As K-Swiss looks to build momentum with its recently launched performance running shoes, they are also at work re-launching their newly acquired Palladium boot brand. In addition to two prominent billboards promoting the brand, one in Soho and the other in Williamsburg, the company’s ad agency also put together a time lapsed video of the Soho billboard being painted. Yes, they still paint billboards in NYC. Check it out: http://tinyurl.com/lzvk6v.





-Living wage campaign to be launched - Worker organisations in Asia are launching a campaign named "Asian Floor Wage Campaign" in October to demand international apparel buyers and big apparel brands to pay a few cents extra for their purchases as a way to ensure decent wages for garment workers. The campaign will also ask for support from trade unions and consumer movements in the US and EU, the main export destinations of apparel from Asia. Trade unions believe that big western retailers like Walmart,Carrefour, Tesco,JC PenneyandMarks and Spencerare in a position to force their low purchasing prices on garment manufacturers in Asian countries due to the global economic slowdown. The Asian Floor Wage sets a standard basic wage for garment workers across Asia, based on cost of living. It is currently calculated at 475 international dollars (using the purchasing power parity method of the World Bank) for Asian countries. <fashionnetasia.com>


-The Brazilian Association of Footwear Industries (Abicalcados) has asked the Ministry of Development, Industry and Foreign Trade to remove Vietnam from a list of countries being sued for dumping their shoes on the domestic market. The proposal was made after Brazil's Trade Protection Agency got the results of its investigation of Vietnamese shoemakers. Currently, China is the only defendant in the lawsuit. The Abicalcados’s move is expected to offer an opportunity for Vietnam’s footwear enterprises to increase their share and improve their competitive edge in the Brazilian market. The Abicalcados submitted the anti-dumping petition to the agency on October 30, 2008, asking for a probe into the imports from Vietnam, China and several other countries. Investigations were launched on December 15 and the agency found that Vietnamese shoemakers did not damage the Brazilian shoe market. The Vietnam Leather and Footwear Association said the volume of footwear exported to Brazil was relatively small, reaching almost US$40 million between January-November 2008. <fashionnetasia.com>


-Global mergers-and-acquisitions activity remains low - In its preliminary third-quarter report, released Wednesday, Mergermarket noted that the number of announced deals in the first three quarters of 2009 ranks the lowest, at just 1,759, since the same period in 2003. The value of transactions completed to date — $978.9 billion for 5,914 deals — is 48% below the volume in the first three quarters of 2008. According to the report, “The passing of the financial crisis appears to have made little impact on the established M&A league tables, at least for now.” Mergermarket points to the U.S. as having the highest near-term potential for increased M&A, although the U.S. mergers market has declined by 41% in volume year-to-date in 2009, and 34% in value. M&A in the Asia-Pacific region dropped 25% in both volume and value in the first three quarters of 2009. The European M&A market, meanwhile, declined 70% in value and 48% in volume in the first three quarters. However, Mergermarket pointed out that the Russian consumer retail sector is one area of interest for private-equity firms, because profitable Russian retailers are in need of capital. <wwd.com/footwear-news>


-EU: Textile manufacturers exempt from carbon auctioning - Key elements of the textile and clothing industry in the EU are likely to be exempt from the EU's plans to auction carbon dioxide emissions permits from 2013. According to the draft list of businesses that are under exemption released by the European Commission, selected industries including manufacturers of cotton, wool, silk, flax-type fibres, dyes, underwear, knitted and crocheted clothing would have free carbon credits from 2013 to 2020; pollution permits would be capped at the 2007-8 levels of the most efficient 10% of companies in a particular sector.  <fashionnetasia.com>


-GE, B of A in Finance Deals With BCBG and Quiksilver - The corporate retail finance group of GE Capital as well as Bank of America are the co-agents of a $400 million asset-based credit facility to BCBG Max Azria Group. The BCBG loan will be used for working capital needs, according to GE Capital. The facility may be increased to up to $450 million if certain conditions are met. GE Capital is the co-collateral agent on the facility, while Bank of America, the other co-lead, is administrative agent. BCBG is a Vernon, Calif.-based firm founded in 1989, and has more than 13,500 retail and wholesale sites worldwide. Its portfolio has 22 brands, including BCBG, Max Azria and Hervé Léger. “GE delivered the liquidity and flexibility we needed to grow our business,” said Ben Malka, BCBG’s president, who added that the loan will help the firm expand its new Miley&Max line for Wal-Mart Stores Inc. GE’s corporate retail finance group also acted as collateral agent on a $200 million asset-based credit facility for Quiksilver Inc., for which GE Capital Markets was the co-lead arranger along with Bank of America. The loan will be used for working capital needs in the Americas. <wwd.com>


-Duran Outlines New Lacoste Strategy - José Luis Duran, the new chief executive officer of Devanlay SA, Lacoste’s global apparel licensee, attended his first-ever fashion show in the Bryant Park tents earlier this month. While Duran is a newcomer to the fashion arena — even he called Carrefour’s apparel business “weak” — his core expertise in branding, international operations and retail management will be brought to bear on Lacoste. Duran said he plans to focus on three key areas of the business, which last year rang up sales of almost one billion euros, or $1.47 billion at average exchange. First, Devanlay is striving to establish a global Lacoste e-commerce business; second, the company is aiming to expand key items beyond the iconic crocodile logo polo shirt, and, third, it plans to expand Lacoste’s presence in emerging markets, which are primed for growth. <wwd.com/menswear-news>


-Sport-Haley gets Como license - Windsong Brands LLC has licensed Sport-Haley Inc., a Denver-based golf apparel specialist, to produce and market men’s and women’s sportswear under Windsong’s Como Sport brand. <wwd.com/business-news>


-H&M is to start selling online - in the UK from next autumn, following the decision made by its fast fashion arch-rival Zara to do the same last week. The announcement came as the Swedish fashion giant revealed third-quarter pre-tax profits were slightly higher than expected, although August sales were heavily down. H&M, the world’s third-biggest clothing retailer by sales, says pre-tax earnings in the nine months to the end of August were up 4% to 4.77 billion Swedish Kronor (£428m) compared with a forecast SEK4.75bn (£426m), and SEK4.59bn (£412m) last year. <retail-week.com>


-Advance Auto Parts advances its e-commerce initiative - Nearly seven months after dissolving PartsAmerica.com, which Advance Auto Parts Inc. jointly operated with CSK Auto Inc., the automotive parts retailer is gearing up its own e-commerce initiative. Early in the fourth quarter, Advance Auto Parts, No. 261 in the Internet Retailer Top 500 Guide, will launch a new e-commerce site. While key details of the site have yet to be released, the new site will have advanced features and functions, including a buy online/pick up in store program, says an Advance Auto Parts spokeswoman. “We expect to go live with the new web site early in the fourth quarter,” the spokeswoman says.  <internetretailer.com>


-Brooks to sponsor Rock 'n Roll Marathon Series over New Balance and Sugoi companies - Brooks Sports has reached an exclusive and multi-year agreement with The Competitor Group to become the official footwear and apparel partner of the Rock 'n Roll Marathon Series beginning in Spring 2010. Currently, New Balance is the footwear sponsor and Sugoi is the apparel sponsor. <sportsonesource.com>


-Local Names Maria Pinto, Lee Allison, and Hart Schaffner to Design Apparel for Olympic Delegates -  When the women of the Chicago 2016 delegation speak before the IOC next week, the outfits they'll be wearing will be designed by Maria Pinto. Designer Lee Allison has been working with Chicago 2016 for awhile and all the neckties and neckscarves worn next week are his creation. Putting the men in suits fell in the capable of hands of legendary Chicago clothiers Hart Schaffner Marx, who like Pinto and Allison, won't reveal anything about their creations for next week. <wgntv.com/news>



RESEARCH EDGE PORTFOLIO: (Comments by Keith McCullough): KR, DKS


09/23/2009 10:43 AM


Kroger is up on the day and Levine doesn't do Krogering "on valuation"... Valuation is not a bullish catalyst. Trends here are nasty. KM


09/23/2009 03:07 PM


Buying after my team just met with the company in Pittsburgh. There is still 15% short interest here and plenty hedge funds hanging around in McGough's 2 year old short thesis. KM







VFC: Rust Sharp, Director, sold 4,800shs ($347k) after exercising the right to buy 4,800 shares nearly 70% of total common holdings.


M: Karen Hoguet, CFO, sold 11,500shs ($219k) after exercising the right to buy 11,500 shares less than 15% of total common holdings.


KSS: Wesley McDonald, EVP & CFO, sold 2,000shs ($112k) after exercising the right to buy 2,000 shares roughly 5% of total common holdings.


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