We were asked by a subscriber why we covered our Warnaco short so quickly. Let’s be clear…fundamentally, our retail team does not like this story. There are secular margin headwinds here, license loss risk, mediocre brand portfolio, limited cushion if things go south, and downright poor quality of management. As it relates to the stock, sell sentiment is quite high (80% of ratings are Buy), short interest is re-testing lows, and management is selling. To cap it off, yesterday there was a sell-side upgrade, which Keith shorted in to. I’m surprised that the stock is only off by 1.2% today given the big miss at Iconix (another questionable quality model that is tied to a licensing model) just 2 months after a secondary. But we are mildly concerned about event risk into an analyst event WRC is hosting on Friday. What you see here is Keith managing risk around his TRADE duration (3 weeks or less). Just because he covered a TRADE for a gain, it does not mean that it is no longer on our bench as a fundamental short. It will take more than a few percent in the stock for that to happen. Unless the bottom falls out from under this stock very soon, my sense is that we will be more vocal on WRC in the not-too-distant future.is that we will be more vocal on WRC in the not-too-distant future.