CFOs Shift Focus to Managing Slow Growth

There are a couple of flaws with this study by PWC Canada Retail Consulting Services. Notice at the end when they suggest only 25% of the survey participants (CFO’s) indicated that they had increased their advertising budgets. Can you think of one retailer that has not increased their marketing budget over the past year? Also, 30% of the respondents did not have a functional web site.

Therefore, we’re betting that this study’s “31 respondents” are generally not large retailers. You could listen to a round of quarterly conference calls and get a better read of what retail CFO’s are thinking than wasting your time to read this ‘report.’

Business Inventory Gains Continue to Slow

Yep, inventory levels are well controlled in retail land. That is, everywhere but Volcom (VLCM – $). The company had the audacity to report a +65% year-over-year inventory increase at the end of Q3 2010. Wow!

Cotton Posts Worst Fall in 15 Years

It appears that the thunderstorms in Texas last week were not as impactful on the cotton crops as expected. That said, we’re still close to record prices that were set on Tuesday.

Pre-Halloween sales at Black Friday prices

Just how promotional is it at the mall today? Black Friday starts early!

Hedge-Fund Manager Eisman Challenges Genworth

This is exactly what’s missing on quarterly conference calls. Investors and analysts need to start asking tough questions, especially to management teams that have consistently underperformed. Just this week alone, we needed more of this on calls with AVP, BWLD, PFCB, PG, and VLCM (to name a few).

Austerity Measures Draw Ire in France, U.K.

U.K. sales fell sharply and unexpectedly in August 2010 “Since the U.K. government announced its austerity measures in the emergency budget of June 22.” This same observer goes on to suggest that “You can be sure that similar pressures on spending will be evident in countries such as Ireland and Spain and Italy.”

J.C. Penney Ends ‘Big Book’ Catalogues

The question is how much is the company spending on “specialty in-store mailers” versus catalogues this year? The company tries to portray its relatively weak Internet channel sales as a function of the lack of catalogues this year. But, it’s likely that the company has simply shifted that spend towards specialty mailers and Internet advertising. Therefore, the relatively weak Internet sales growth is disconcerting.

Coffee Prices Take Off

North of $2 per pound and moving higher.

Wal-Mart Set To Sell the Nook

Big-box retailers are tripping over themselves to sell e-readers. But, when you go to one of these stores, you tend to see the e-readers on shelves collecting dust. We get a kick out of the quote in this article… “The Wal-Mart customer is a slightly different demographic than at Barnes & Noble.” You think???

Texas Hailstorms Drive Cotton Prices Higher

Cotton buyers just can’t get a break. A Texas storm drives prices even higher. Prices today are +53% higher than just 3 months ago.

Coach Enters U.K.

They failed once. Let’s see how COH performs in Europe this time around.

J.C. Penney Hires Goldman Sachs for Ackman Battle

Bill Ackman suggests that JCP’s real estate portfolio is “better than the competition.” We’re not sure he understands who the competition is. In addition, he has yet to meet with management. He’s right that JCP has been an underperformer of late. Q3 2010’s positive comp store sales… yet, flattish profitability is disconcerting. Plenty of downside risk at $33/share.

Grocery Chains Increase Ad Spending Amid Price War

The retail industry topic that has received little attention thus far in FY 2010 is the large-scale increase in marketing dollars. Yet, price points are down and markdowns are up.

Regional Department Stores Battle National Chains

We’ve all heard how successful the My Macy’s initiative has been at M. But, many others in the department store peer group are having success as well. So, is it My Macy’s or broader department store strength?

August Imports Set Volume Record

August 2010 represented record apparel/textile import volume over the past 21 years. Clearly, retailers placed these orders at a time when the macro environment appeared to be much stronger than today. Watch for heavy markdowns over the holiday season.

Belk Rebrands for the Future

It’s comical to see the critical outrage that came this week with The Gap’s new logo. But, take a look at this new logo from Belk as they embark on a $70 million re-branding effort. The company’s new logo has the tag line “Modern. Southern Style.” Why hang onto the chain’s stodgy southern heritage in 2010? Good grief, they could not do better than this?

Retailers’ Holiday Hinges on Discounts

Mark it down. NRF says +2.3% sales growth over the holiday season this year while ICSC says +3.0% to +3.5%.

Anticounterfeiting Efforts Going Global

It’s interesting to note who is not included in the group of countries that have signed-up to band together and attack this problem. China. Nonetheless, a good start.

Weak Economy Has Nations Waging Currency Wars

Currency wars are much more important to the retail sector today than trade wars. That said, a weaker U.S. Dollar greatly boosts the earnings for U.S. retailers that have a material number of stores overseas.

Retailers’ Solid September Sales Raise Holiday Hopes

We chuckle when Mr. Ullman is cited as saying JCP beat its internal expectations for back-to-school sales. Yet, the company was unable to raise its quarterly EPS guidance. So, promotions were higher than expected as well. No mention of that part of the equation.