DECK - No near-term turnaround, but cutting store anchor
We never really understood the DECK store opening strategy. Now the company is hiring a 3rd party to close 15% of its current portfolio.
If you look at the store opening cadence since 2006 when the company had just 2 stores and fast forward to where we are today at 142 doors, and what that's subsequently done for returns as capex as a % of sales went from 1% as UGG relied on its wholesale distro to 5% at the height of the sq. ft. investment, it tells a pretty compelling negative story.
The question now is, as costs roll off and the company abandons its store strategy, will we see margins re-inflate and asset turns re-accelerate as the fixed asset base consolidates. The top line has been underwhelming for 3 straight quarters and doesn’t give us confidence in the immediacy of a turnaround, especially in an economy that is #latecycle.
We wouldn't touch this with a 10 foot pole on the long side today, with inventories up 26% on 1% sales growth. But it’s a name over the course of 6-9 months that might be worth taking a look at as working capital gets cleaned up, and assets are rationalized.
BBBY - This Bed Bath promo email is hilarious.
BBBY sent out this promo email yesterday, and it featured a bag of pretzels. That's it, a bag of pretzels. It's comical to think that a $2 discount on a bag of Pretzel Crisps can drive foot traffic. 'In Store Only'!
JCP - JCPenney pursues sale of home office campus
(http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsCompanyArticle&ID=2136090)
DKS - Sports Authority to Take Steps Toward a Bankruptcy Filing
MAT - Mattel interested in possible merger -- has requested financial information about Mayborn, owner of prominent baby product manufacturer Tommee Tippee
(http://news.sky.com/story/1636597/mattel-makes-play-for-tommee-tippee-owner)
Big-box home décor retailer At Home has added four more locations averaging almost 100,000 sq. ft. each to its growing store portfolio
(http://www.chainstoreage.com/article/home-dcor-retailer-continues-expand)
JCP - JCPenney announced that it is pursuing sale of Home Office campus in TX in effort to reduce outstanding debt
(http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsCompanyArticle&ID=2136090)
Kate Hudson's fashion athletic brand Fabletics opening 2,000 sq.ft. store in Mall of America
(http://www.chainstoreage.com/article/fabletics-continues-offline-push)
Report says successful malls in India are changing strategy by reducing the size of anchor stores from ~70,000 sw. ft. to ~25,000 sq. ft. to bring in more international brands
