R3: VFC, GIII, URBN, and the NFL


October 18, 2010


With the majority of the NFL licenses locked up again for several years, we believe we’ll see renewed interest and marketing surrounding the next generation of on and off-field merchandise.  In the interim, choose your jerseys wisely as team uniforms, colors, and logos, are likely to see some tweaks in 2012.





- With hard earned cash hard to come by, retailers are thinking creatively about bartering and trade-ins.  Toys R Us is currently offering up to $100 for used iPods this week in exchange for a cash/gift card to be used towards a new device.  Recall that Radioshack and Costco also offer electronics trade in programs.


- Ralph Lauren’s latest boutique on 109  Prince St. in Soho is leading some to speculate what exactly may be coming to this former Replay Jeans location.  The window stencils read “Ralph Lauren Quality Goods Proprietor”- a new tagline.  We suspect this may be an accessories focused boutique, especially given its proximity to two other locations within a several block radius.


- According to the Pew Research Center, 85% of Americans own a cell phone while only 59% own a desk top computer.  Laptops are owned by 52% Americans, 47% own an MP3 player, and 42% own a game console.


- Add wedding packages to the list of creative initiatives to drive traffic and ‘other revenue’ streams at McDonald’s. Cakes made of burgers, or apple pies is just one of the custom touches available for interested couples, which average about 10/week at Hong Kong locations – the first to offer this option. While these packages are not yet offered in the U.S., it’s just a matter of time and also begs the question when lavishly decorated retailers might also consider opening their doors for nuptials.





Anthropologie Introduces Accessories Only Concept - Anthropologie is opening an accessories-only store Oct. 29 in Chevy Chase, Md., the first of several new retail concepts it will roll out. The 1,400-square-foot accessories-only store at 5402 Wisconsin Ave. will have the largest selection of shoes, handbags, scarves, belts, costume jewelry, fine jewelry and, for the first time, estate and antique jewelry, including one-of-a-kind brooches and engagement rings. There will also be handcrafted one-off pieces and reworked vintage styles. The store’s initial assortment will include shoes by designers Rachel Comey, Chie Mihara and Bourne, among others. Accessories were designed by Marion Vidal, Eugenia Kim, Ikou Tschuss and Leslie Oschmann.  <wwd.com/retail-news>

Hedgeye Retail’s Take:  Given URBN’s methodical approach to testing and incubating, we’re not going to get overly excited (yet) about this concept.  However, if there is any fashion retailer  that can create the look and feel of a specialty boutique (while still backed by a multi-billion dollar corporation) it’s URBN.  More to come here for sure. 


VF Licensed Sports Group to Extend NFL Partnership - VF Licensed Sports Group and the National Football League (NFL) have reached an agreement to extend apparel rights. The new contract, which starts in 2012, marks the 25th anniversary of the VF-NFL partnership, which began in 1987.  <sportsonesource.com>

Hedgeye Retail’s Take:  With NKE taking the lead with the on-field license, there may be some positive “rub off” for other licensees given the marketing efforts that are likely to ensue with the transition to the Swoosh. 


G-III Apparel Group, Ltd. Signs Expanded License With NFL - G-III Apparel Group, Ltd. has entered into a new, extended and expanded license agreement with National Football League Properties, Inc. to manufacture and market men's and women's outerwear, sportswear, and swimwear products in the United States under a variety of NFL trademarks, according to a release by the company. <sportsonesource.com>

Hedgeye Retail’s Take:   See above.  In addition, we’d keep an eye on the women’s opportunity which should be the largest growth opportunity under the NFL license umbrella. 


Luxury Goods Update - Sales of luxury goods may climb this year to the highest level since 2007, led by demand in China and a rebound in the U.S., according to Bain & Co. Sales of high-end apparel, accessories, watches and jewelry and other products may rise to as much as $236 bn, helped by currency moves including the appreciation of the dollar. Sales of leather goods will lead the increase, gaining 20%. Sales in stores directly operated by makers of luxury goods may grow 20% in 2010, while wholesale revenue may rise 6% as U.S. department stores restock inventories. <bloomberg.com>

Hedgeye Retail’s Take: Sustainability of this demand remains the key question as stock shortages have begun to impact retailers heading into the holiday season. The offset with potential staying power continues to be the devaluation of the dollar relative to far east economies – as such, domestic luxury brands will be at a considerable competitive disadvantage to counterparts with global scale.


Apparel and Textile Imports Continue to Rise - Apparel and textile imports in August rose to their highest one-month volume in two decades, despite flagging consumer confidence and a dim outlook for the holiday season. Combined shipments of textiles and apparel to the U.S. increased 28.6%. Apparel shipments increased 23.1% and textile imports rose 33.9%. <wwd.com/business-news>

Hedgeye Retail’s Take: Driven primarily by concerns over rising shipping rates, retailers have been building inventory in an effort to stem one of the many components of cost inflation in the 2H. Inevitably, some retailers will get overaggressive setting up the likelihood of increased promotional activity at selective concepts and an opportunity for better managed and quality retailers to notably outperform.


Apparel Weakening, Prices Falling - Two government reports released Friday point to a weakening in demand for apparel, as retail sales fell and prices declined. In yearly comparisons, specialty store sales were up 3.2%, department store sales were off 0.8%, and general merchandise stores saw a 2.6%increase. Meanwhile, economic pressures drove retail apparel prices down a seasonally adjusted 0.6% in September, and decreased 1.2% compared with a year earlier. Women’s apparel prices fell 0.8% while men's dropped 0.2%. <wwd.com/business-news>

Hedgeye Retail’s Take: With department store performance lagging broader retail, expect the channel to lead promotional cadence heading into the holiday season.


USA Bid Committee To Focus on 2022 FIFA World Cup - The USA Bid Committee has withdrawn from the 2018 FIFA World Cup bid and will exclusively focus on the 2022 campaign. <sportsonesource.com>

Hedgeye Retail’s Take: The 2010 World Cup in South Africa proved yet again that geographic location matters little when it comes to the financial impact of these games for athletic brands. That said, the biggest beneficiaries of a domestic Cup would undoubtedly be the smaller players given the natural halo effect.



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