R3: REQUIRED RETAIL READING
September 20, 2010
While talks of ICON acquiring KCP would keep the business essentially ‘all in the family,’ it’s clear that discussions haven’t been kept quite as close to the vest with shares of KCP up 35% last week.
RESEARCH ANECDOTES
- Over the weekend, J Crew launched its online outlet. The clearance site (which doesn’t look too different from the sale section of the normal site) offers a limited assortment of factory-only merchandise for a limited time. The site is scheduled to open at 12AM on Fridays and closes at midnight on Sunday.
- Add Style Trek to the list of websites aiming to add a bit of democracy to the fashion process. The site which is being hailed as “Facebook meets Net-A-Porter for emerging designers” features an offering from designers across the globe. Style Trek aims to facilitate communication and feedback between designers themselves and consumers. Underpinning the whole concept is the idea that designers can track demand in real time via the open feedback loop they create with their fashionable customers.
- Keep an eye on TwitterMoms, an effort aimed at becoming the modern day version of the “Good Housekeeping Seal of Approval”. The network comprised of 30,000 mommy bloggers acts essentially like one giant, controlled product focus group. Subsets of mom’s/bloggers will be testing CPG products at home and then will provide honest, practical feedback to both marketers and their consumer peers. P&G is currently working on adding a QR code on their product packaging which in turn would allow instant electronic access to TwitterMom reviews right from the shelf.
OUR TAKE ON OVERNIGHT NEWS
J-Crew Kickin' It - J.Crew is better known for knits, but could kicks be the next big thing? The prep-chic store’s exclusive New Balance 1400s are hitting shelves Nov. 1 and could give the retailer a serious injection of sneakerhead cred. The made-in-the-U.S. men’s styles, which Muytjens said were sleek, versatile and worked well with J.Crew’s classic apparel mix, come in bottle-green, deep-blue and black. They will retail at select J.Crew locations. <wwd.com/footwear-news>
Hedgeye Retail’s Take: We don’t expect these exclusive footwear offerings to move the needle for J. Crew, but they could certainly help drive traffic in addition to keeping the brand highly relevant. If you recall, the company carried exclusive metallic Sperry Top-Siders last year that were almost instantaneously sold out. The regularity of this strategy appears to be paying dividends.
ICON Talking Acquisition With KCP - Designer Kenneth Cole is in talks to sell the shoe and clothing company he founded to Iconix Brand Group Inc., the licensing company run by his brother Neil Cole, according to two people with knowledge of the matter. The timing for a takeover of Kenneth Cole Productions Inc. isn’t clear, and the companies may not reach an agreement. <bloomberg.com>
Hedgeye Retail’s Take: With an apparel-heavy portfolio, the addition of KCP’s concentrated footwear weighted stable makes sense in more ways than one given that it’s essentially all in the family. With the stock up 35% last week and trading 8x daily volume Friday this is does not exactly fall into the shocking category.
Niketown Attacked by Bedbugs in NYC - Niketown is the latest New York retail institution to be bitten by bedbugs. The 57th Street superstore shuttered its doors on Saturday after bedbugs were discovered, and it remained closed through Sunday. The store’s street level windows were covered with brown paper, and a sign was posted on the glass stating that it was temporarily closed. At press time, it remained unclear when the Portland, Ore.-based company was planning to reopen the 95,000-square-foot store, which has been a major Manhattan tourist destination since it first opened its doors in 1996. Nike could not be reached for comment on Sunday. In early July, an infestation of bedbugs forced Abercrombie & Fitch’s Hollister flagship at 600 Broadway in SoHo to shut down for a few days. <wwd.com/retail-news>
Hedgeye Retail’s Take: One of the more memorable story-lines of the summer of 2010 for retailers, Nike certainly isn’t the first to be plagued unfortunate event. At this point it’s almost status quo as doors close for only a few days and then it’s back to business as usual – we don’t expect this to be any different.
DBRN Launches Its First E-Commerce Site - Dressbarn, a women’s apparel retail chain with 830 stores, this week launched its first e-commerce site, dressbarn.com. The launch comes in a busy period for parent company Dressbarn Inc., which in the past year has launched an e-commerce site for its Maurice women’s apparel brand and also acquired retail chain Justice. Dressbarn.com has a relatively clean and simple design, reflecting the tastes of the retailer’s customers. <internetretailer.com>
Hedgeye Retail’s Take: More important than the design is simply the fact that Dress Barn in now in the e-commerce game. With this channel typically an outperformer for most retailers, we only see upside to the launch.
American Apparel Gets New Deadline - American Apparel Inc. said Friday it had been given an extension until Nov. 15 by NYSE Amex LLC to file its official financial results for the second quarter ended June 30 and avoid being delisted by the exchange. The embattled Los Angeles-based retailer and wholesaler of trendy basics said it received a letter from NYSE Amex on Sept. 13 that its plan to regain compliance with listing criteria had been reviewed by the exchange and the extension granted. <wwd.com/business-news>
Hedgeye Retail’s Take: Time is critical in these situations and APP was just granted healthy dose of it. You’d probably be pressed to find another retailer that’s pulling harder for a strong holiday season.
Miles Austin Becomes Under Armour Endorser - Under Armour announced a multi-year partnership with NFL Pro Bowl wide receiver Miles Austin. Other Under Armour NFL players include Baltimore Ravens linebacker Ray Lewis, New York Giants running back Brandon Jacobs, Cincinnati Bengals linebacker Rey Maualuga and San Francisco 49ers tight end Vernon Davis. <sportsonesource.com>
Hedgeye Retail’s Take: A great fit for the brand. After a breakout season last year, Austin has been often lauded for his freakishly strong lower half for a receiver and is changing the perception of the position in the process.
The North Face Signs Action Sports Athletes - The North Face announced skiers Tom Wallisch, Nick Martini and Mike Riddle, and snowboarder Kaitlyn Farrington have joined its athlete sponsors team. The North Face has a team of more than 60 professional global athletes which includes snowboarders, skiers, rock climbers, mountaineers and ultrarunners. <sportsonesource.com>
Hedgeye Retail’s Take: Keeping with the integrity of its highly authentic brand, most have never heard of these athletes outside of these niche sports, but this is squarely centered with the company’s marketing/positioning strategy.
Mexico's Upscale Department Store El Palacio de Hierro Plans to Expand - El Palacio de Hierro, Mexico’s upscale department store chain, plans to open 10 stores by 2015 as it continues to expand in the country’s growing luxury fashion market. “We want to expand in Mexico and will open one store per year in the next five years,” marketing director Carlos Salcido told WWD. Fashion and luxury account for 50 percent and 15 percent, respectively, of the chain’s apparel sales. Palacio is striving to persuade high-end global brands to debut in its stores — and the effort has so far proved fruitful. Italy’s Bottega Veneta is set to open two corners, in Palacio’s Santa Fe and Perisur outlets, while Hermès has agreed to open a corner in Guadalajara, a spokeswoman said. Givenchy Leathergoods, See by Chloé and Emporio Armani bags are also arriving in the coming weeks, Lavertu Stevens added. In the high-end shoe department, Jimmy Choo and Marc Jacobs are expected to reach Palacio in the second half. <wwd.com/retail-news>
Hedgeye Retail’s Take: A market at its infancy outside of key tourist destinations, the brands on board are some of the world’s most elite suggesting demand and now opportunity exists for retailers south of the border.
FN Fashion Brands With the Most Twitter Fans - The tweets were flying last week, during the bi-annual New York collections. From celebrity mentions and party pics to product hits and giveaways, designers were relying on social media more than ever to get their brands — and their merchandise — in front of consumers. Footwear News checked out the Twitter pages of all the designers showing around the city to see what news was rocking the Net. Here are some of the top fashion names, ranked by the size of their following: Lacoste 201,640; Christian Siriano 183,568; DKNY 175,906; Victoria Beckham 150,829; Diane Von Furstenberg 105,345. <wwd.com/footwear-news>
Hedgeye Retail’s Take: Not to be overlooked, the current television spot featuring the red ‘lego-styled’ handbag and its ascension to popularity is closer to reality than not – these early trend reads are valuable.
Top Buyers Weigh in on the Spring Footwear Trends in New York - Strongest Trends: Height such as platforms, wedges, espadrilles and stacked heels; Ankle interests; Nude colors such as ivory, sand, tan, cognac, vacchetta and blush tones; Natural materials, including wood-bottomed wedges, rafia platforms, canvas uppers and macramé woven details. Must-Carry” Styles from New York: Height in every which way; Neutrals; Natural materials. Directional Styles: nudes, natural materials, height and ankle interest. <wwd.com/footwear-news>
Hedgeye Retail’s Take: Lagging the trend towards neutrals that we’ve seen in furniture over the last year, when has height not been in favor?
Ankle Boots Are In - Ankle boots continued to gain momentum on the catwalks, with printed ponyhair, corset lacing and mixed material styles taking center stage. Alexander Wang’s utility laceups with cut-out heels ensured he will stay on top, while Rebecca Minkoff’s dalmatian booties from her footwear launch also promised to be must-haves. Suede uppers and stacked heels were key, while corset lacing added serious sex appeal to covered-up spring boots. <wwd.com/footwear-news>
Hedgeye Retail’s Take: If you didn’t know, now you know…
Cambodia: Four-Day Massive Strike Ended - A massive strike of garment workers in Cambodia ended last Thursday following government intervention and promises to arrange talks with the garment manufacturers. <fashionnetasia.com>
Hedgeye Retail’s Take: The successful resolution of one of the industries strikes/disputes is inherently positive for other negations.
Vietnam: Shoe makers eye on domestic market - Vietnamese shoe manufacturers have plan ambitiously to increase its current 30% of the domestic market share to 50% by the end of the year. According to the Leather and Shoes Research Institute, Vietnamese consumers purchase 130 million pairs of shoes per annum, or 1.5 pairs per person per annum. Currently, 70% of products to meet the demand are being fed by imports. <fashionnetasia.com>
Hedgeye Retail’s Take: Aggressive domestic growth coupled with the country’s growing export business will require among other things, substantial capacity growth - a positive for domestic infrastructure plays.
iTwist Footwear - iTwist Footwear, the original interactive and changeable footwear brand, celebrates color, fun and individuality. Patented swivel tech allows wearers to flip over the tops of their flip-flops and reverse the tongue on their shoes to reveal different colors and graphics. Giving wearers complete control over their style with cool colors, graphics and textures, iTwist footwear features self-contained functionality, no parts to lose and no extra inventory for retailers. With a proven track record for selling their licensed technologies on product from major brands including K Swiss Tongue Twister™, Stripe Shifter™ and Band Em™, U Turn Sports kicks off the launch of iTwist Footwear with their product line of reversible sandals, flip-flops and slides for Spring 2011, with shoes to soon follow. <news4us.com>
Hedgeye Retail’s Take: The innovation here (if want to call it that) is not in the function of the shoe, but rather the design whereby wearers can change the color pattern of their flops by flipping the thongs over to the alternate side. Perhaps it will be marketed as a value proposition – essentially a 2-for-1 – but in all likelihood this will be the first and last time you hear of this one.
