- Urban Outfitters announced they are shuttering the Leifsdottir wholesale business and will sell the brand exclusively through its Anthropologie stores and its direct-to-consumer business. Johanna Uurasjarvi, creative director for the brand, was named executive creative director of Anthropologie product design. The brand was still available on the web sites of Bergdorf Goodman, Saks Fifth Avenue, Neiman Marcus and Nordstrom Wednesday, but wholesale deliveries will stop after the spring season. “This change gives us the best opportunity to maximize the brand equity of the Leifsdottir label, and we are excited to welcome Johanna back to the Anthropologie business,” said Glen Senk, chief executive officer of Urban Outfitters. The company expects to record roughly $2.7 million in one-time costs to dispose of some of the brand’s assets and inventory. Leifsdottir, a traditional Scandinavian surname that means “daughter of Leif,” launched in the fall of 2008. It was tracking at close to $20 million in wholesale revenue and was growing, but Urban came to the conclusion that there was not enough margin and that it was a niche brand with limited high-volume potential. However, it did generate a decent amount of buzz and we believe it should become a sizeable brand for the chain on the retail side.
- Amazon.com reported after the close on Tuesday that first quarter sales soared over 38% to $9.857 billion, above analyst estimates for $9.57 billion, but net income fell sharply by 33% to $201 million ($0.44 Diluted EPS), far below the $0.61 per share analysts were expecting, as the company continues to spend heavily to develop the technology infrastructure and distribution centers to support its growth. This was the 6th straight quarter of at least 36% top-line growth, but also the fourth consecutive quarter that operating profit, which dipped by over 200 basis points compared to a year ago, came in below estimates. However, it appears the aggressive expansion is paying off for America’s fastest-growing retailer as Amazon forecast current-quarter revenue of $8.85 billion to $9.65 billion, above Wall Street expectations of $8.7 billion.
- Rock & Republic is going to Kohl’s under a licensing deal with VF Corp., which acquired the brand’s trademarks for $57 million last month. Kohl’s will be the exclusive retailer carrying Rock & Republic apparel and accessories beginning next spring. Continue reading ‘Thursday News & Notes’
Posts Tagged 'kohl’s (kss)'
Thursday News & Notes
Published April 28, 2011 Uncategorized Leave a CommentTags: amazon.com (amzn), kohl's (kss), retail news, starbucks (sbux), urban outfitters (urbn)
Retail Quick View: Sears Goes Exclusive with Bongo
Published February 18, 2010 Uncategorized Leave a CommentTags: jc penney (jcp), kohl's (kss), private label, retail, sears
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RetailSails has learned that Iconix Brands has signed an exclusive licensing deal with Sears Holdings for its Bongo Brand. Ever since the merger of Kmart and Sears in 2005, the combined Sears Holdings has been way behind the apparel curve and failed to create any national brands, while competitors Kohl’s, J.C. Penney, Walmart and Target have significantly increased their exclusive and private label presence.
Bongo is one of 21 brands owned by Iconix, and is currently sold in mid-tier department stores. We estimate the main jeans brand in both junior and girls has been in the range of at most $30 million in volume, while shoes, accessories, etc. does a lot less than that. Another brand of Iconix – Mudd – went exclusive with Kohl’s in late 2008, and we estimate volume in that brand went from about $100 million to $500 million since the deal was signed. Based on that experience, we estimate Kmart/Sears can easily do well over $200 million on Bongo in the first year alone.
Since the merger, most people have questioned whether Sears is a retailer or a hedge fund, and they have woefully under-invested in stores. Most of upper management was made up of hedge-fund wizard Eddie Lampert’s former friends and colleagues from the financial world, rather than executives with retail experience. However, we believe two recent hires could represent a turning point in the company’s fortunes. Continue reading ‘Retail Quick View: Sears Goes Exclusive with Bongo’
Retail Round-Up: 8/13/09
Published August 13, 2009 Uncategorized Leave a CommentTags: abercrombie & fitch (anf), consumer spending, dillard's (dds), jc penney (jcp), kohl's (kss), nordstrom (jwn), retail sales, same-store sales, wal-mart (wmt)
Macy’s kicked off 2nd-quarter earnings season for retailers yesterday, and things picked up today with the Commerce Department reporting July Retail Sales and retail behemoth Wal-Mart reporting this morning, followed by earnings reports from department stores Kohl’s and Nordstrom. So far, the theme has been “not as bad as it could have been”, with all those reporting having beaten the oft-lowered analyst estimates on cost-cutting measures and inventory management. However, there are few signs that consumers are in a hurry to boost their discretionary spending – the best that can be said of top-line results is they have stabilized at an extremely low level.
- Nordstrom reported fiscal 2nd quarter net income of $105 million ($.48 per share diluted), which met consensus analysts estimates, but both measures decreased more than 26% from the year ago period. Net sales for the quarter declined 6.2% to $2.145 Billion, while same-store sales decreased 9.8%. While this breaks a string of 3 straight quarters of double-digit comparable store declines, it should be noted that this quarter included 3 of the 5 annual sales events held by the company, which helped boost results. For the quarter, Full-Line Stores showed a same-store sales decline of 12.3%, while Direct-to-Consumer Sales were up 3.5%, and Nordstrom Rack once again showed relative outperformance with a same-store sales increase of 0.8%. The company expects full year same-store sales to decline 9-12%, and is raising guidance for the full year from $1.50-$1.65 a share, up from the previous outlook of $1.25-$1.50.
- Kohl’s reported a 3% decrease in net income to $229 million ($.75 per share diluted) in the fiscal second quarter compared to last year. Net sales increased 2.2% to $3.806 Billion, while same-store sales decreased 2.3%. Kohl’s has been a beneficiary of consumers continuing to trade down, and results have steadily improved since November. They have also been able to increase sales of store brands, and have shown gross margin expansion in 5 straight quarters. For the rest of the year, the company expects sales to be roughly flat year-over-year, with comparable sales falling 3-5% and earnings to decline about 10%.
- Wal-Mart stopped reporting monthly sales back in May, so their was a lot of anticipation for their quarterly same-store sales results. In the fiscal 2nd quarter, the company said total sales fell 1.4% to $100.1 Billion, while same-store sales declined 1.2% vs. analyst estimates of a 0.85% increase. However, leaner inventories helped boost the bottom line, as net income came in a few cents ahead of estimates at $3.44 Billion ($.88 per share diluted), roughly flat to last year. The strong dollar negatively impacted results, as sales rose on a constant currency basis by 2.7%. The company attributed the worse-than expected comparable sales results to underestimating how much of a boost it got from shoppers having tax rebates last year, as well as lower food and gas prices. Regarding the results, CEO Mike Duke said “Short term, we believe the economy will continue to be challenging. We are accelerating our focus on reducing expenses and improving productivity in all of our operations.”
Based on the data points we saw this morning: disappointing retail sales, a jump in unemployment claims, and another record number of foreclosures, there is no reason to expect much near-term improvement for most retailers. While companies like Kohl’s and Wal-Mart have been able to grab market share and lure value-conscious consumers, they continue to focus on cost-cutting and re-aligning inventories with demand. Buyers are still extremely cautious and only shopping for necessities, and we don’t expect much of an uptick in discretionary spend through the next quarter.
Next up on the radar is earnings reports tomorrow from Abercrombie & Fitch, Dillard’s, and JC Penney, followed by a multitude of companies reporting next week. Expect the majority of retailers to best watered-down earnings estimates, while touting their restructuring, cost savings, and inventory management initiatives.
Retail Outlook: Back-to-School 2009
Published July 31, 2009 Uncategorized Leave a CommentTags: aeropostale (aro), back-to-school, buckle (bke), consumer, economy, jc penney (jcp), kohl's (kss), retail sales, ross stores (rost), tjx companies, walmart (wmt)
After a summer of unseasonably cool and wet weather, retailers hope they can woo shoppers back to the stores in time for the all important back-to-school season. However, if recent surveys are any indication, results will most likely be disappointing for the 2nd largest shopping season behind Christmas.
Back-to-School season officially kicks off this weekend with sales tax holidays in Georgia and Mississippi, to be followed by 13 other states throughout August. Most states offer exemptions on clothing, school supplies, books, computers and peripherals up to a certain dollar amount. This year, many states grappled with the balance between giving consumers a break and further weakening their own perilous financial situations. As a result of economic conditions, Washington D.C., Florida, Maryland, and Massachusetts decided not have tax holidays for back-to-school this year.
The National Retail Federation (NRF) is forecasting total back-to-school sales of $17.4 Billion, a decrease of 13.2% from last year, while America’s Research Group expects a decline of 8.5-12% on top of a 5% drop in 2008. The NRF projects average spending per family with kids aged 6-17 to drop by 7.7% to $548.72, which would be the lowest since 2006:
The NRF expects large spending declines in all categories except for electronics, which is expected to be the one bright spot, as total spending is expected to increase 4.1% and spending per family to be up 10.7%. The NRF expects total spending declines per category of: -18% for clothing and accessories, -19.8% for shoes, -21% for school supplies. In its own survey, Deloitte said that 81% will pare back on clothing, 49% will spend less on shoes, 32% will spend less on supplies, and 30% will spend less on backpacks and book bags.
The recession is still weighing heavily on the minds of American families, and though the economy is starting to show signs of stabilization, consumers are still spending extremely cautiously. Worries about unemployment, debt, and investment losses as well as high gas and food prices will continue to shape consumer buying behavior.
According to a survey of moms with kids aged K-12 conducted by OfficeMax, by far the most important buying factors are durability, price, and value. Products that are environmentally friendly are becoming more mainstream, as 34% of respondents said they would buy more eco-friendly products this year, while Deloitte said 41% will buy more “green” products this year and 31% will seek out “green” retailers.
We expect those stores that have been out-performers since the start of the year to continue to shine. Off-price retailers TJX and Ross Stores have taken market share from traditional department stores as consumers continue to trade down. Teen retailers Aeropostale and The Buckle have so far been immune to the recession, and should continue their impressive run. Dollar stores like Family Dollar and Dollar General should draw a decent chunk of the school supply business. And of course Wal-Mart will draw more shoppers than any other with its unbeatable prices and broad merchandise offerings. Most traditional department and apparel/accessory stores will continue to struggle as they have over the past year. Value-oriented names such as Kohl’s and J.C. Penney will outperform their peers, but most likely still post negative year-over-year comps.
Shoppers are also craving convenience, and drug stores will be the largest beneficiary as they have broadened their merchandise mix beyond health and beauty products to include school supplies, small electronics, and even groceries. According to the NRF, the number of families planning to shop at drug stores is 18% higher than last year. Nielsen is forecasting a slight rise in sales of school supplies to $2.17 Billion, and James Russo, Vice President, Global Consumer Insights, said “The winners this season will be retailers who offer strong discounts and appeal to the consumer’s desire for savings and value. Look for gains from supercenters, dollar stores, drug stores and to a lesser extent, club and grocery stores.”
Retailers have been preparing for back-to-school season by clearing out merchandise and preparing lean inventories with the expectation of reduced volume. They also started promotions early, with retailers including J.C. Penny, OfficeMax, and Staples all moving towards social media campaigns this year to complement their traditional media presence. While the use of social media by teens has exploded over the past few years, retailers should take note of the fact that parents are making more of the buying decisions this year. According to America’s Research Group, just over half of American parents are trying to get their children to wear what they wore last year, and they are flexing their parental muscle in the matter, with children’s influence on buying decisions dropping by at least 20% compared to last year.
With Labor Day falling a week later than last year, retailers are hoping early promotions jump-start the extended back to school season. However, the OfficeMax survey finds that 41% of moms buy the essentials right before school starts, filling in items as needed, while 31% buy everything right before school starts. Only 28% said they would stock up on items through the summer. The NRF had similar findings, as the majority of families won’t begin their shopping until 3 weeks to 1 months before school starts.
While there are signs the recession is easing and consumer confidence is starting to slowly creep up, economic conditions are still having a large impact on consumer buying conditions. Most retailers will continue to struggle with year-over-year comp declines as they will be up against tough figures from last year when consumers had stimulus checks in their pocket. With expectations so low for back-to-school, we most likely won’t see substantial improvement from retailers until the holiday season.
