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November 6, 2009

Some interesting call-outs from Sales Day, but some notables in the athlete endorsement world probably slipped through the cracks for most people. Good for UA all around. Adidas slight positive.


Two interesting call-outs yesterday that had nothing whatsoever to do with Same Store Sales – but with athlete endorsements.

  • Adidas dropped its University of Central Florida sponsorship after Marcus Jordan wore his Dad’s brand of choice (i.e. Nike’s Brand Jordan) on the floor of a recent game. The deal guarantees all student-athletes will wear Adidas unless the athlete can't wear that specific shoe because of medical reasons and a custom shoe can't be made. UCF Officials claim that they had obtained an exemption for Jordan due to his lineage, but Adidas claims that they never agreed to such a request.  This really smells more to me like Adidas wanted to get out of this deal, and found a good reason to walk. Adidas ’10 hinges on more cost cuts – and they need every penny they can get.

Even though Marcus is only a shadow of his father as it relates to raw ability, they share brand loyalty. Remember when Michael draped an American flag over him to avoid being seen in a Reebok logo on the podium of the 1992 Olympics?


  • Under Armour endorsed Georges St-Pierre, and subsequently broadened its reach into the world of Mixed Martial Arts (MMA). The irony is that while MMA athletes don’t wear shoes and typically sport little more than Speedo-like shorts, the company is looking to St-Pierre to serve as the face of Under Armour’s Underwear as well as it’s Recharge suit. Why do I like this? It definitely reinforces UA’s hard-core image by stepping into the fastest growing spectator sport in the US. Nike won’t touch this area, because they can’t enhance the athlete’s performance and have better ROI opportunity elsewhere. But this works for UA. Also, I like the dollars. The math of endorsing a top MMA athlete vs. football, baseball, or even a below-average hoopster is pretty much a no-brainer.



  • K-Swiss is looking to grow its recently acquired Palladium brand and early results are positive. Interestingly, management looks to Converse (specifically All-Stars) as a model for which to emulate. The Palladium boot/shoe is actually a very simple product, with its iconic styling defined by its chunky rubber sole. Given that the sole essentially defines the brand (like the Converse All-Star), the main difference between all styles is the color, material, and height of the upper. As a result of this simplicity, management believes over time Palladium should be one of the more profitable products in the company’s portfolio.
  • In an effort to boost PR and generate traffic, Bebe formed a partnership with the Kardashian sisters to develop and design an apparel line. The reality TV stars will produce one line per season, comprising about 12-15 styles. The first merchandise produced under the collaboration will arrive in the Spring 2010. We just hope the “star power” lasts long enough for the first line to hit the floor!
  • After a strong start to October, aided by easing comparisons and a favorable weather backdrop, most retailers cited softening trends as the month progressed. Weeks four and five were consistently called out as having more challenging results. Despite the slowing trend, the tight inventories and early strength in seasonal merchandise sales still managed to drive earnings higher for a handful of companies.


-Congress Passes Tax Aid Bill - Congress sent a bill to President Obama’s desk on Thursday that would provide millions of dollars in tax refunds to retailers and manufacturers, as well as additional aid to millions of unemployed workers. The House passed the bill 403 to 12 after the Senate passed the measure on a vote of 98 to 0 Wednesday night. Obama is expected to quickly sign the legislation. Retail trade associations pressed for an expansion of the so-called net operating loss carryback, which allows large companies to carry their losses back two years and apply for refunds on taxable profits. The new bill will now allow businesses that had operating losses in 2008 or 2009 to seek refunds for taxes paid on profits over the past five years. Under the economic stimulus bill enacted earlier this year, the net operating loss carryback was extended from two to five years for small businesses with gross receipts of $15 million or less, from 2008. Under the new bill, small businesses that already elected to carry back in 2008 can also elect to carry back losses from 2009. <wwd.com>

-M&A Companies Hunt for Beauty Targets - As the beauty sector begins to shrug off the effects of the recession, it is emerging flush with dealmaking activity. While merger-and-acquisition activity percolates, strategic buyers are coming to the fore. Beauty brands strong in alternative channels, such as television shopping or specialty retailing, are considered to be among prime candidates for takeover, as are natural or eco-friendly brands, experts agree. What’s more, fragrance licenses are being signed and changing hands at an ever-faster rate. <wwd.com>

-China’s nonwovens and technical textile industry bounces back - Industry adjustments, government action and product innovation kept China’s textile industry solvent in -the first half of 2009, in spite of a decline in exports due to the global economic crisis. While the outlook for China’s textile industry for all of 2009 is not a cause for wholesale optimism, China Nonwovens & Industrial Textiles Association (CNITA) has identified four types of textile enterprises that have fared well, providing a measure of hope during an uncertain economy. Entering 2009, China’s macroeconomy showed some improvement, including an expansion in the scale of loans and an increase in the purchasing managers’ index (PMI). The Chinese government increased the ratio of tax refunds on exported textiles and apparel by three times and introduced a series of structural adjustments and revitalization plans for textile industries. These policies have stimulated China’s textile economy, which at midyear appeared to be bouncing back. <specialtyfabricsreview.com>

-FUBU Returning to U.S. - FUBU, an original player in hip-hop streetwear, is aiming for a comeback. Starting in fall 2010, founder Daymond John will reintroduce the brand, which exited the U.S. market about five years ago amid increased competition and a decline in popularity. John is hoping the convergence of surf-skate and urban fashion trends will result in a renewal of the label for a larger audience. FUBU will seek to appeal to a younger, more diverse crowd than the original line with what John described as a “Carhartt-meets-Abercrombie & Fitch style,” and average price points of $65. It will be targeted to specialty stores such as City Blue, Trends, Jimmy Jazz and S&D. The bulk of the first collection will be men’s wear with a smattering of women’s and some swimwear.  <wwd.com>

-Consumers will spend 18% less online in Q4 than a year ago, study predicts - Shoppers will spend an average of $281 the fourth quarter this year, a 18% decrease compared to the same period last year and a 24% increase compared to Q3, a new report finds. The report, conducted by research and consulting firm Javelin Strategy & Research and commissioned by eBillme, a payments service that allows consumers to pay with funds in the bank, polled 1,200 consumers to predict online spending for the quarter.  <internetretailer.com>

-Kimberley Process Passes on Action Against Zimbabwe - The future of the Kimberley Process and the global image of the diamond industry hung in the balance after the organization’s annual meeting ended Thursday in the Namibian capital of Windhoek without any decisive action against Zimbabwe for alleged gross human rights abuses of diamond panners and for using the profits from diamond sales to prop up Robert Mugabe’s oppressive regime. The southern African nation, bordered by South Africa, Zambia and Mozambique, was high on the agenda of the Kimberley Process, the international regulatory body formed in 2002 as an initiative between governments, industry and civilian groups to stem the flow of conflict diamonds. <wwd.com>

-Vanguard Trade Show Readies Debut -The MRket trade show will launch a sibling called Vanguard next season that focuses on the contemporary market. It will be staged adjacent to MRket at the Jacob K. Javits Convention Center in Manhattan from Jan. 18 to 20. Vanguard will bring a new dimension to MRket, which caters mostly to tailored clothing and traditional men’s wear brands. “MRket has grown quickly and retailers and vendors have been asking us to add a section for contemporary and luxury brands,” said Charles Garone, director of sales for the Vanguard show. “The new show will have a completely different look and feel from MRket. There will be partitions between the shows, but traffic will be able to move freely between the two.”  <wwd.com>

-Juicy Couture to Open Airport Shops - The contemporary brand, which did $600 million in sales last year, plans to target customers when they travel, opening four stores at airports worldwide beginning in December. The first will launch in Miami International Airport’s American Airlines terminal, followed by the British Airways terminal at New York’s John F. Kennedy International Airport in January. In February, a Juicy store will open in the Taiwan TaoYuan International Airport’s Terminal II through Juicy’s Asian distribution partner, Lane Crawford.  <wwd.com>

-Home Depot builds a new interactive gift card strategy - By letting shoppers personalize gift cards online, including with their own uploaded photos, Home Depot expects to increase the rate of card redemption and drive more incremental sales both online and in stores, says Michael Homiak, director of gift card and incentive programs. “When people use our gift cards, they tend to spend more,” he says. Home Depot recently launched a new online gift card program with CashStar, which provides hosted web technology that lets gift card buyers choose from several card images or design their own card with uploaded images and text. <internetretailer.com>

-Izod to Become IndyCar's Title Sposor - The IndyCar Series, whose drivers include Danica Patrick and reigning champion Dario Franchitti, said today that the apparel brand Izod agreed to become the series' title sponsor in hopes of widening the sport's popularity. Izod, a division of clothing maker Phillips-Van Heusen Corp., said it signed a "multimillion-dollar" deal covering at least six years with plans to increase the media and Internet promotional efforts of the newly named Izod IndyCar Series. <latimes.com>


BBY: Bradbury Anderson, Vice Chairman, sold 31,000 shares after exercising options to buy 31,000 shares for a net gain of $248k.

RL: Hubert Joly, Director, purchased 2,000 shares for a total of $152k.

VFC: George Fellows, Director, sold 4,800 shares after exercising options to buy 4,800 shares for a net gain of $218k.

NFLX: Reed Hastings, CEO, sold 10,000 shares for a total of $525k.