WWDMagic: Buyer In Cautious Mood Click to Open PDF
Buyers at the bi-annual trade show continue to be careful about where they invest their inventory dollars.
Posted: Monday, August 22, 2011
Source: WWD

Denim Aces Test for B-T-S Bucks Click to Open PDF
Flared bottoms still having a tough time catching on here in the U.S. Also, in our view, analysts are making too big of a deal about colored denim. Colored denim will not last long and will not be found at mainstream teen retailers (e.g. AEO, ANF, etc.).
Posted: Wednesday, August 24, 2011
Source: WWD

Groupon Stumbles in China, Closes Some Offices Click to Open PDF
Groupon is learning “on the job” in China.
Posted: Wednesday, August 24, 2011
Source: WSJ

Collective Brands Pursuing Strategic Alternatives Click to Open PDF
One of the more interesting conference calls of the Q2 earnings season. Big picture, the interim management team confessed that the prior strategy of putting too much focus on a higher-end consumer was ridiculous and that the core chain will again start to focus on its core customer (lower-end). While current EPS expectations for the next 3-6 months may still be out of reach, it’s refreshing to finally listen to a management team that gets it and is making all the right strategic moves. Dumping the prior CEO offers the company the best opportunity for success.
Posted: Wednesday, August 24, 2011
Source: WWD

Jobs Quits as Apple CEO Click to Open PDF
The story of the year. He’ll be missed. But, here’s how this is going to play out over the next 1-2 years. Jobs is leaving at the “top.” Sales will soon decelerate (it’s inevitable) and folks will begin to blame Jobs’ departure and/or the new management team. But, the fact is that sales were likely to decelerate from today’s peak’ish levels whether Jobs resigned or stayed.
Posted: Thursday, August 25, 2011
Source: WSJ

Web Retailers Seem Likely to Weather Any Downturn Click to Open PDF
A secular shift that has changed the dynamics of the brick-and-mortar retail space as everyone knew it just 3-4 years ago.
Posted: Monday, August 15, 2011
Source: WSJ

Ed Lampert Fund Boosts Gap Stake Click to Open PDF
Is GPS the next SHLD? Probably not. But, Mr. Lampert could learn a lot from GPS CEO Glenn Murphy on how to best run a retail operation.
Posted: Tuesday, August 16, 2011
Source: WWD

H&M Kick-starts Growth in Texas Click to Open PDF
Uh, oh. H&M starts to invade middle-America.
Posted: Tuesday, August 16, 2011
Source: WWD

Retail Apparel Prices Rise in July Click to Open PDF
The sector reported the highest seasonally adjusted July increase in overall apparel prices ever recorded for July. Typically, apparel prices decline in July (clearance mode). Not this year.
Posted: Thursday, August 18, 2011
Source: WWD

Target to Launch Revamped Website Click to Open PDF
This strategic shift may be a material top-line driver for TGT.
Posted: Friday, August 19, 2011
Source: WSJ

California Sales Tax Cut Could Boost Spending Click to Open PDF
How are sales in California relative to the rest of the country? The state reversed its 2009 +1% tax hike.
Posted: Wednesday, August 10, 2011
Source: WWD

USDA Slashes Outlook on Corn, Soy, Wheat Click to Open PDF
U.S. grain and soybean harvest forecasts for this year have been slashed. The USDA was criticized last year for providing too rosy of a forecast. The cuts made Thursday appear “proactive” according to one analyst.
Posted: Thursday, August 11, 2011
Source: WSJ

Wal-Mart Shakes Up Its Online Business Click to Open PDF
Good grief! It appeared that Eduardo Castro-Wright was essentially demoted to run the online division. Now, WMT reorganizes its e-commerce operations. Taking a step back, we always thought it was odd that WMT stopped providing online sales growth disclosures over the past 12-18 months. We may now know why.
Posted: Friday, August 12, 2011
Source: WSJ

China Yuan Hits Fresh High for Third Straight Day Click to Open PDF
Just when you thought it was safe to go back into the water (cotton prices head lower), the stronger Chinese Yuan could be the next drag on merchandise margins.
Posted: Friday, August 12, 2011
Source: WSJ

Heading Back to School, but Not the Stores Click to Open PDF
What’s interesting is that August week #1 was supposed to be the weakest sales week a year ago. This particular study suggests that August week #1 sales this year were a disappointment. Uh, oh.
Posted: Friday, August 12, 2011
Source: WSJ

Reminder: We like to look at the Commerce Department data on a comp basis (year-over-year change). Hey, it’s government data, so caveat emptor. This month’s report delayed due to an annual revision of the data. See Full Report Here.

Big picture, our favorite measure of “what’s happening at the mall” (excludes Motor Vehicles, Gasoline, and Building Materials) suggests a +6.6% year-over-year sales improvement in July 2011. This represents the strongest growth rate since March 2006.

The most compelling category specific storylines in July 2011 were:

Big ticket categories had been struggling the most of late. But, in July 2011, Furniture & Home Furnishing Stores and Electronics & Appliance Stores each reported a stronger year-over-year growth rate than June 2011. That said, sales for these two categories were only flattish versus LY.

Got inflation? Grocery Stores delivered robust +8.2% year-over-year growth in July 2011. This represents the category’s strongest year-over-year growth since at least 1998 (our data only goes back that far). The previous strongest year-over-year growth rate was +5.7% in August 2008.

Furniture & Home Furnishing Stores are down -20.6% over the past 4 years (i.e. July 2011 versus July 2007)… by far the worst performing category over that timeframe. Motor Vehicles & Parts Dealers are only down -10.2% over the same timeframe.

Food Services & Drinking Places have now reported 11 consecutive months of year-over-year growth that is greater than +4.0%.

Monthly “Big Picture – what’s happening at the mall” year-over-year results for the trailing 12 months:

July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011

+4.2% (-0.7% 2-year) +4.8% (+1.2% 2-year) +4.8% (+3.3% 2-year) +5.0% (+4.7% 2-year) +5.8% (+6.2% 2-year) +4.9% (+7.7% 2-year) +5.2% (+7.5% 2-year) +5.2% (+8.5% 2-year) +5.3% (+10.4% 2-year) +6.0% (+10.5% 2-year) +6.2% (+10.3% 2-year) +6.0% (+10.7% 2-year) +6.6% (+11.1% 2-year)

Luxury Goods Continue to Shine Click to Open PDF
Antoine Belge, a luxury retail analyst at HSBC, suggests that “Luxury is no longer the first thing that people cut back on.” Say again? Take a look at the biggest comp sales decline in 2008/2009. The largest declines came from the luxury sector (e.g. compare SKS vs. M). With equity markets in decline, we’re curious if we’re about to see that phenomenon play out again (luxury again underperform relative to more moderate price points)?
Posted: Posted: Sunday, July 31, 2011
Source: WSJ

Sycamore Partners Takes 9.9% Stake In Troubled Talbots Click to Open PDF
Sycamore expects to “engage in discussions with management… concerning the business, assets, capitalization, financial condition, operations, management, strategy and future plans.” Gosh, that would be a short discussion as these guys don’t have a clue.
Posted: Monday, August 1, 2011
Source: WSJ

Amazon Battles States Over Sales Tax Click to Open PDF
An extremely interesting article. The article shows how Mr. Bezos was so obsessed with the ability to limit the charging of sales tax that in 1996 he considered locating company HQ on an Indian Reservation in California.
Posted: Wednesday, August 3, 2011
Source: WSJ

Study: Wal-Mart Losing Price Edge Click to Open PDF
In the last 5 years, WMT is no longer considered the least expensive place to shop.
Posted: Wednesday, August 3, 2011
Source: WSJ

Shoppers Lured In By Deep Discounts in July Click to Open PDF
July 2011 was the hottest July since Planalytics began tracking temperatures in the U.S. in 1960.
Posted: Thursday, August 4, 2011
Source: WSJ