| Research Notes: Dec 5, 2011 – ANN, URBN |
StoreIntel |
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Mall Walk Notes
- Our overall take from today’s mall walk is that stores seem to have had a mediocre weekend. From the department stores through the off-price channel, we sense business was a bit of a disappointment coming off a strong Black Friday.
- We aren’t surprised, but have a watchful eye on out on the cold-weather categories such as sweaters and outerwear. In our opinion, when assessing a retailer’s inventory outerwear is a major liability at this point in time.
- We feel that after today most of the East coast and Midwest temperatures for the next 10 days should slide into more seasonably appropriate temperatures which will play a significant factor in sales of the sweater category.
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Ann Taylor (ANN)
- The company is running 50% off all markdowns as of Friday. Our sense is this would make ANN one of the more aggressive retailers in this space with respect to markdowns.
- The wear-to-work traditional suiting category seems to be quite promotional, with suiting jackets marked down from $249 to $149 with an additional 50% off making the out-the-door price $75. This would seem to make them very close to cost plus 10%, which concerns us as of today.
- We are concerned about margins for the fourth quarter, but it’s too early to tell and this should be viewed as a reference point and not an actionable data point.
- A new floor set hit the stores today, with a red and white story replacing the pastel turquoise and silver story. Overall, the product assortment continues to be quite strong.
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Urban Outfitters (URBN)
- We are concerned about the amount of clearance product at both Urban Outfitters and Anthropologie stores were running at several locations we visited
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DISCLOSURES
Analyst Certification:
The research analyst who is primarily responsible for the research reports in this publication has certified that the views expressed therein accurately reflect the analyst’s personal views about the subject companies and their securities. No part of the analyst’s compensation was, is, or will be directly related to any specific recommendations or views contained in the research report.
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The following disclosures are made pursuant to FINRA Rule 2711. “Research analyst” in the disclosures below refers to the associated person who is principally responsible for, and any associated person who reports directly or indirectly to such a research analyst, in connection with, the preparation of the substance of a research report, whether or not such person has the job title of “research analyst.”
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The analyses and data presented in this report are based on information obtained from third parties and although we believe the information to be current and accurate, we make no representation about the accuracy or completeness of this information. This report should not be the only source of information used to make investment decisions. RS has no reason to believe any of the information obtained from third parties is material non-public or that the source of information has any duty to maintain the information in confidence. RS accepts no responsibility for any loss or damage suffered by any person or entity as a result of any such person or entity’s reliance on the information presented in this report or email. Opinions and estimates expressed herein constitute judgments as of the date appearing on the report and are subject to change without notice. This report is solely for informational purposes and should not to be construed as an offer to buy or sell securities and is not intended to provide investment advice or to recommend the purchase or sale of any security by a particular investor.
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