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Takeaway: UA’s Wisconsin deal another notch against NKE. Tough Sept for AMZN US? OSTK furniture @ 86% off. C-Suites getting younger.

UA - Under Armour signs 10yr deal to outfit University of Wisconsin.  Under prior Adidas deal, Wisconsin was getting $1.375mm in product and $800k in cash.  UA will provide $2.45mm in product and $4mm in cash annually.  Importantly, UA now has 3 of the 14 Big Ten teams (Maryland, Northwestern, Wisconsin).


Wisconsin is just a drop in the bucket compared to what UA spent to lock down the Fighting Irish (UA - $10mm per year) and what Nike doled out for U of Michigan ($11.2mm per year), but there are a few interesting points we took from the deal…

1) Adidas is backing down meaningfully. The PR department at AdiBok was sure to throw in its public statement that it 'chose not to renew the deal'. Just like the company chose not to renew the deals with Michigan, Notre Dame, Tennessee, etc. By saying "chose not to renew" Adidas is saying "can not afford or get a positive ROI".

2) Obviously the team/league sponsorship hasn't worked in the US, but we're also skeptical about the efficacy of the stepped up endorsement spend on individual athletes where NKE especially, and UA to a lesser extent , already dominate. To cite one example -- Adi is spending $200mm on NBA MVP runner up James Harden, and is having a hard time getting the athlete to wear the brand in public.

3) UA now dominates the Chicagoland sports scene with partnership agreements inked with Northwestern, Notre Dame, and Wisconsin all of which have a big presence in the city. And the company owns the naming rights to the Cubs spring training facility and is one of the 5 legacy partners with the team. That's no coincidence given that the brand opened a 30k sq. ft. Brand House smack dab in the middle of Michigan Ave. Keep in mind that Chicago is the penultimate 'Jordan Town'. At least, it has been...

Retail Callouts (10/9): UA, NKE, Adibok, URBN, W, OSTK, WMT, RL, AMZN - 10 9 2015 chart1

URBN - Urban Outfitters asked some salaried employees to volunteer at a fulfillment center in Pennsylvania expecting a busy October. Company said hourly employees were willing to help, but were rejected to comply with labor laws. To URBN's credit, it's rare that people will work for free in any profession. But all-in, the request from URBN crosses the line.


W, OSTK - Overstock.com is offering 16% off furniture to celebrate its 16th birthday. At face value, we thought "that doesn’t seem very steep, the regular discount is 40-50% on OSTK." But if you check out the website you see that it's the standard discount (which is currently 70%) plus an additional 16%. Basically, OSTK is selling furniture for 86% off. People don't look at OSTK as often as they should when analyzing Wayfair -- but they should.  This discounting is severe.


WMT - CFO Charles Holley to retire Dec. 31, 2015 after 20 years. Brett Biggs, 47, will succeed Holley. Now WMT has a 49 year old CEO and 47 year old CFO. The age trend for retail executives continues to head lower. Note that with Ralph Lauren's recent announcement, the average age of the C-Suite went from 61 to 49 years.


AMZN - Comps from ChannelAdvisor are out.  This is actually a reasonable underlying directional indicator for AMZN's business, as outlined by mapping out the 2-year run rate for each on a quarterly basis. The bad news, however, is that September slowed on both a 1 and 2 year basis.

Retail Callouts (10/9): UA, NKE, Adibok, URBN, W, OSTK, WMT, RL, AMZN - 10 9 2015 chart2

Retail Callouts (10/9): UA, NKE, Adibok, URBN, W, OSTK, WMT, RL, AMZN - 10 9 2015 chart3

Can Everlane Really Become the Next J.Crew?


Ikea to open a Jacksonville, FL store in 2017.  Store planned to be 294,000 SqFt.  This will be Ikea's 1st store in North Florida, and its 5th in the state.


WMT - Laura Phillips to become senior VP of sustainability.  Current VP, Manuel Gomez taking position as VP of e-commerce strategy for Walmart Mexico/Central America.


UA -  Under Armour settles lawsuit around issue of new non voting stock to protect CEO Plank's control of the company.  The company issue additional compensation to the holders of Class C stock in the form of a dividend with a value of $59 million.


ASNA - Golden Gate discloses 9% stake in Ascena Retail Group


ARO - Aeropostale Signs License Agreement With Himatsingka America For Home Textiles