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 November 23, 2009


With Black Friday week now upon us, retailers are taking a slightly different approach with deals designed to boost earlier sales this year. We’ve already commented on several companies who have turned Black Friday into a weekly event throughout the month (Sears), but over this past weekend the real push began.  Many retailers including Kohl’s, Target, Wal-Mart, Best Buy, Amazon, and JCPenney are now offering Black Friday 2009 pre-sale deals.   Given that almost every circular has been leaked by now, it is interesting to note that online deals are not terribly different than those that will be available on Friday. Yes, there will still be plenty of loss-leading doorbusters for the most avid shoppers to fight their way through, but this increased “pre-sale” activity really makes us wonder.  Is it really worth all the hassle to get in line at midnight on Thursday night to save $50 on a $700 TV?  To some, the answer is most defninitely yes.  But to others, the internet is making it incredibly easy to comparison shop and locate the best deals even before Black Friday officially occurs. 

Most importantly, the industry has set these plans up well in advance.  Inventories are tight, and promotional plans over the next seven days have been locked in for months.  So while “Black Friday” is now a universal term for “let the shopping games begin,” we caution that all this excitement is just one small portion of the next six weeks worth of holiday angst and speculation. 


  • Add luxury department store Barney’s to Ron Burkle’s (Yucaipa) holdings in the retail/apparel space. According to new reports, Burkle and his firm have been buying Barney’s bank debt from Citi. Yucaipa also recently reported a 16.8% stake in Barnes & Noble and is also known to be the owner of specialty store chain Scoop and P Diddy’s clothing line, Sean John.
  • Hibbett Sporting Good management noted that the company is well positioned to take advantage of current trends in the licensed apparel business. Strong performance in college football from Texas and Alabama coupled with the NFL’s Saints are lining up well with HIBB store base in these markets. If Alabama were able to compete (and possibly win) in the national, championship game, HIBB believes it could be a “few million” dollar sales opportunity.
  • Footlocker management noted that weak sales trends seen in the month of October have continued into November. The promotional environment has been aggressive by some competitors, but Footlocker does not except to be overly promotional given that its inventories have been managed inline with sales trends. Weakness is consistent across the store base (malls, urban, and off-mall) and across all regions. On the product side, the categories of basketball and running are also weak.


Spending by Consumers Probably Increased: U.S. Economy Preview  - Consumer spending probably rebounded in October, showing that mounting unemployment is restraining, not derailing, the biggest part of the U.S. economy, analysts said before reports this week. Purchases increased 0.5 percent after dropping by the same amount in September, according to the median estimate of 61 economists surveyed by Bloomberg News before a Commerce Department report due Nov. 25. Other figures may show orders for durable goods and home sales climbed. Consumers added to their wardrobes, frequented restaurants and bought more automobiles last month even after the government’s trade-in incentive expired. A jobless rate that is projected to remain above 10 percent through the first half of next year means households will still be hard-pressed to boost spending further, limiting their contribution to growth. <bloomberg.com>

Europe Manufacturing, Services Expansion Accelerates - Europe’s services and manufacturing industries expanded at the fastest pace in two years in November after a reviving global economy helped the euro region emerge from the worst recession in more than 60 years. A composite index based on a survey of purchasing managers in both industries in the 16-nation euro area rose to 53.7 from 53 in October, London-based Markit Economics said today in a statement. That was the highest since November 2007. A reading above 50 indicates expansion. The European economy is gathering strength after global governments spent billions on stimulus measures to encourage spending. While euro-area exports increased the most in more than a year in September, the euro’s strength is making goods less competitive abroad just as rising unemployment undermines consumer spending, threatening the recovery.  <bloomberg.com>

European Footwear Importers Encouraged by EC Vote - As expected, the European Commission Anti-Dumping Advisory Committee voted 15 to 10 last week against renewing anti-dumping duties set to expire this year for leather footwear from China and Vietnam.  The committee consists largely of technocrats appointed by the trade or finance ministries of each member country, the majority of which tend to favor more open trade. Observers still expect the full European Commission to push for a 15-month extension of the anti-dumping duties to placate shoe producers in Southern Europe. The European Outdoor Group (EOG), which represents several major U.S. footwear brands, said it will continue lobbying trade ministers against renewing the duties, which tax Chinese and Vietnamese leather footwear imports at 16.5% and 10% respectively. The EOG represents Columba Sportswear, Merrell, The North Face, Timberland as well as a handful of European outdoor footwear brands.  <sportsonesource.com>

South African Economy Rebounds as World Cup Nears - South Africa’s spending to host the 2010 FIFA World Cup, the world’s most-watched sporting event, and a rebound in manufacturing may have pulled the economy out of its first recession in 17 years in the third quarter. The economy expanded an annualized 0.5 percent in the three months through September, ending three consecutive quarters of contraction, according to the median estimate of 23 economists surveyed by Bloomberg. Statistics South Africa will release the data at 11:30 a.m. in Pretoria tomorrow. <bloomberg.com>

Macy’s, Kohl’s Gain by Promoting Housewares for Frugal Holidays - Blenders and sweaters may rise in popularity this holiday season as consumers seek to replenish kitchens and wardrobes rather than spend money on luxury gifts. Macy’s Inc. is promoting oven mitts that are meant to be used as stockings and can be stuffed with kitchen gadgets. Wal- Mart Stores Inc. had its strongest sales in sleepwear, socks and underwear in the third quarter, the company said this month. “We’re going to see a gift-giving frame of mind that is more utility focused,” said Stephen Cardino, vice president and fashion director of Macy’s home division, in a telephone interview. “The kitchen’s the heart of the home now.” <bloomberg.com>

Tesla to go public soon - Electric car maker Tesla Motors Inc. reportedly plans to go public soon in what would be the first IPO for a U.S. automaker since Ford Motor Co. in 1956. Reuters cited two unnamed sources Friday afternoon that it said are familiar with the matter but didn't give a specific time frame. Palo Alto-based Tesla's Chairman Elon Musk has said in the past that he thought the six-year-old company could do an IPO by this year. But that was before last fall's stock market dive. <sanjose.bizjournals.com>

Douglas Jumps Most in 8 Months as Mueller Buys Stake - Douglas Holding AG, Europe’s largest makeup and perfume retailer, rose the most in eight months in Frankfurt trading after confirming that competitor Mueller Ltd. & Co. KG bought a stake in the company. Closely-held Mueller purchased a 3 percent holding, Douglas said today in an e-mailed statement. Erwin Mueller, the billionaire owner of Germany’s fourth-largest drugstore chain, plans to raise the stake to 18 percent and wants to combine the companies’ purchasing, Focus magazine reported today, without citing anyone. Switzerland’s Bank Sarasin & Cie. AG has bought 14 percent for Mueller over the past few months, Focus said. <bloomberg.com>

Retailers aren’t waiting to offer Black Friday deals - The day after Thanksgiving, also known as Black Friday, is no longer the kickoff for holiday bargains. In fact, several prominent multichannel retailers, including J.C. Penney, Sam’s Club and Best Buy are promoting Black Friday sales more than a week in advance. Dell and other retailers are extending Black Friday offers via e-mail. Some of the deals, are tailored to Black Friday-like, door buster sales at specific times. For instance, both J.C. Penney and Sears plan sales tomorrow starting at 7 a.m. (the J.C. Penney sale ends at 1 p.m., the Sears sale ends at 12 p.m.). Sam’s Club will preview its sale Monday via e-mail and text messages, and allow shoppers to purchase the featured items two days later, the day before Thanksgiving on the web. Other retailers, like Best Buy are already offering a condensed version of their Black Friday offers both in-store and on the web. <internetretailer.com>

Best Buy sees bump in traffic, Nielsen Online reports - Best Buy saw an 18% jump in year-over-year traffic for October, attracting 14.68 million unique visitors, Nielsen Online reports. GameStop.com and Newegg.com both registered 16% traffic increases to 3.82 million and 3.23 million unique visitors, respectively. Meanwhile, there were 82% fewer unique visitors to the relaunched CircuitCity.com web site than there were a year earlier to the site of Circuit City Stores Inc., which went bankrupt this year. CircuitCity.com is now owned by Systemax, owner of such e-retail sites as TigerDirect.com and CompUSA.com.  <internetretailer.com>

Manhattan Retail Rents Decline Overall - It helps, but with the economy still volatile and unsteady, even location isn’t a guarantee that retail rents in Manhattan’s top shopping corridors will rise. Asking rents declined in 11 of 16 prime retail districts between fall 2008 and fall 2009, according to a new survey by the Real Estate Board of New York, a 12,000-member group representing commercial and residential property owners, builders and brokers, among others. Overall average asking rents for retail space in Manhattan fell 9 percent to $117 a square foot from fall 2008 to fall 2009, the report said. <wwd.com>

Chanel Reopens in San Francisco - Chanel Inc. has reopened its boutique here after a major refurbishment that transformed the narrow, three-floor building’s interior and exterior. This was the first redo of Chanel’s 7,900-square-foot store since it opened in 1988 as the first luxury fashion boutique to locate on Maiden Lane, a two-block gated pedestrian street off Union Square where Marc Jacobs, Hermès, Prada and Tory Burch are now located. The renovation took eight months, requiring the boutique to move to a temporary location next door.  <wwd.com>

Nike Appoints UW Provost to Board - NIKE, Inc. has appointed Phyllis M. Wise, Ph.D. to its board of directors. Wise, 64, is the EVP and Provost of the University of Washington, where she is also professor of physiology and biophysics, biology, and obstetrics and gynecology. "Dr. Wise’s outstanding academic career, experience as a respected university leader and administrator of a multi-billion-dollar budget for the University of Washington, is a rare combination that makes her an ideal addition to our board,” said Philip H. Knight, Nike Founder and Chairman. “We look forward to her contributions to expand Nike’s position as the industry leader in innovation.” Wise was appointed VP and provost of the University of Washington in August 2005 and became EVP in September 2007. <sportsonesource.com>

Head of Walmart Latin America to Exit - Vicente Truis has announced his departure as executive vice president, president and chief executive officer of Walmart Latin America. He leaves after serving less than five months in the role. Walmart has not reported Truis' reasons for his exit, nor an announcement of a replacement. Prior to beginning his Latin America role, Truis served as the executive vice president, president and chief executive officer of Walmart Asia. And before that, he spent 11 years leading the retailer's Brazil operations. <licensemag.com>