FL | Black Book Ahead of the Print
Wednesday, @ 1PM ET
For Full Details CLICK HERE
Hedgeye Retail Idea List - Moving LULU up on the short side.
We're moving LULU up a few notches on the core short idea list. The stock is working for the year-to-date, but fundamentally, we still think that this is a very good brand housed within a bad company. Management is shooting to get back to a mid-50s gross margin, which is admirable. But the company has to invest in talent, distribution, branding, and e-commerce capability -- all which will A) take margins down, B) subsequently repair the top line (in 2+ years), and then, and only then will we even think about paying for a 'margin improvement story' here -- especially with UnderArmour and Nike committing incremental capital to women's fitness. We still think there is a meaningful management shake-up this year at LULU.
W - Wayfair adding office space, + 1,400 employees.
(http://www.pressherald.com/2016/02/18/wayfair-to-bring-nearly-1000-jobs-to-maine/)
Various news sources have reported 3 new office building for Wayfair (2 in Maine, 1 in Texas) over the past couple of days equaling an addition of 1400 employees. That equates to an increase of 43% from current levels. Just another example of the company investing in the infrastructure to recognize a $90bn TAM that we think is overstated by as much as 50%.
NKE - Nike officially opens doors for Jordan Brand store located in the Central District of Hong Kong, complete with wall of all-gold Air Jordans
(http://solecollector.com/news/2016/02/jordan-8-wellington-hong-kong)
Fast-growing Kit and Ace seeks top executives after CEO let go
(https://www.biv.com/article/2016/2/fast-growing-kit-and-ace-seeks-top-executives/)
Toys "R" Us - Toys "R" Us trying to replace $1.6 billion in junk-rated bonds coming due through 2018
(http://www.wsj.com/articles/toys-r-us-poses-a-test-for-junk-bond-markets-1456099656)
Sperry named official footwear of SoftBank Team Japan for 35th America’s Cup
MarineMax annoucned 1.25mm share repurchase program -- will replace April 2015 1mm share program, of which 772,716 shares had been repurchased
(http://www.businesswire.com/news/home/20160222005303/en/)
American Apparel head of manufacturing Martin Bailey resigns after 15 years