Monday, September 28, 2009

H&M Teams Up With Sonia Rykiel For Winter '09 and Spring '10 Collections

Nathalie Rykiel, President and Artistic Director at Sonia Rykiel
(Photo: Matthieu Salving/H&M)

H&M has tapped Sonia Rykiel as guest designer for their Winter 2009 and Spring 2010 collections. This will be H&M's eighth partnership with a high-end designer.

The winter collection will consist of lingerie and accessories, making this the first time H&M has ventured into the world of lingerie. The line will launch on December 5th, and will be available in 1500 H&M stores worldwide. The lingerie collection will simultaneously be available in Sonia Rykiel boutiques worldwide.

The Spring 2010 collection will consist of Rykiel's infamous knitwear for women and girls, as well as accessories. This collection will launch in 250 H&M on February 20, 2010.

“Sonia Rykiel is a true fashion icon who invented a signature style around femininity, Parisian chic and modernity - as well as functional, comfortable, wearable clothes", says Margareta van den Bosch, H&M's creative advisor.

Nathalie Rykiel, president and artistic director of Sonia Rykiel says, "The Sonia Rykiel pour H&M lingerie collection is the ideal way to offer the essence of Rykiel to a great number of women around the world, and a beautiful way to close the year. The knitwear collection is perfect for welcoming a colourful new season".

Obit: Donald Fisher, 81. Gap Co-Founder

SAN FRANCISCO (Reuters) - Donald Fisher, who co-founded Gap Inc (GPS.N) with his wife Doris forty years ago, died on Sunday after a battle with cancer, the clothing retailer said.
He was 81.

The company that the Fishers began as a little denim store in San Francisco now operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Japan and Ireland, and it has been credited with inventing the specialty retail category.

The Fishers opened their first store in San Francisco in 1969, and named it The Gap in reference to the generational differences between baby boomers and their parents.

When it first opened, the Gap mainly sold Levi's jeans, tapes and records, and it flourished in 1970s as consumers snapped up its denim.

Read the full story at Reuters

Thursday, September 24, 2009

H&M Sales Drop Worsens in August Because of Inventory Shortage

By Sarah Shannon

Sept. 24 (Bloomberg) -- Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, said a sales decline worsened in August because of a shortage of discounted inventory.

Revenue at stores open at least a year fell 11 percent last month, the fourth consecutive drop and worse than July’s 3 percent decrease, Stockholm-based H&M said today. The retailer also reported a 4 percent gain in third-quarter net income to 3.46 billion kronor ($504 million), below the 3.5 billion kronor average estimate of 11 analysts compiled by Bloomberg.

H&M said sales in Spain, the U.S. and France were “weak” in the third quarter because it had too little inventory to keep pace with discounting by competitors. Same-store sales declined 6 percent, though gross margins widened by 0.8 percentage points, led by internal currency hedging policies.

“The stock is down as people are looking at the markdowns and the sales deterioration,” Chris Walker, an analyst at Nomura, said by phone. “The gross margin is a positive surprise from their hedging policy, so we’re not too concerned.”

H&M fell 12 kronor, or 2.9 percent, to 396.50 kronor at 11:10 a.m. in Stockholm trading. The shares have risen 30 percent this year, compared with the 27 percent gain of rival Inditex SA.

H&M said it plans to increase store numbers by 240 this year, raising the target from 225. Planned openings include 18 Monki and Weekday stores and nine higher-priced COS outlets. The retailer will start selling fashions online in the U.K. from fall of 2010, it also said today.

‘Demonstrating Confidence’

“This is clearly demonstrating business confidence and we expect will be positively received by the market,” Alessandra Coppola, an analyst at Standard & Poor’s Equity Research in London, said by e-mail. She has a “sell” recommendation.

Third-quarter revenue was 23.5 billion kronor excluding value-added taxes, the company said, an increase of 13 percent from a year earlier, or 3 percent excluding currency swings.

“H&M results were weaker versus our expectations,” Simon Irwin, an analyst at Liberum Capital said in a report. “We believe H&M needs sustainable upgrades from same-store sales or further progress on costs to justify higher prices,” of the stock, he wrote. Irwin has a “neutral” recommendation.


Wednesday, September 23, 2009

Is Macy's Headed Towards Bankruptcy?

Is Macy's headed towards bankruptcy? The folks at Audit Integrity think so.

In a recent report, the independent financial research and risk modeling firm listed 20 large-cap companies ($1B or more in market capitalization) "that have the highest probability of declaring bankruptcy among publicly traded firms" in the next 12 months, with Macy's making the list. The Business Insider went a step further, whittling the list to the 10 worst of the worst using the following formula:
"Which companies appear the worst off? We took the list and removed any company with a market cap under $3 billion. We then ranked the remaining names by a simple measure of the market's perceived bankruptcy risk - Market Cap (MC) divided by Enterprise Value (EV). The less MC vs. EV, the less residual shareholders' value (above what debt holders can claim) the market is pricing-in for the company. Thus a lower MC/EV means the market thinks the company is more likely to go bankrupt."
Macy's comes in at #4:
4. Macy's

Does anyone even shop at department stores anymore?
Same store sales will likely keep falling at Macy’s right through 2009. With $2.4 billion of maturing debt over the next five years, the company is trying to cut costs, and has already reduced its dividend.

Hopefully the US consumer will bounce back soon, and actually want to shop at Macy's.

I'm not ready to write off Macy's just yet. Their My Macy's initiative has made significant gains , with same-store sales of the program's 20 test market regions outperforming the rest of the company. These gains prompted Citigroup analyst, Deborah Weinswig to upgrade the stock to "Buy" from "Hold" on Tuesday, and double the price target to $30 from $15.
"We are encouraged by the consistent, positive early results that Macy's has reported from its 20 pilot My Macy's markets since spring 2008," the analyst wrote in her note to clients. "My Macy's initiative will be a key driver of same-store sales upside for the company ahead."

The program allows the company to reduce discounts. It also shows signs of improving relationships with vendors, leading to the development of more exclusive lines and unique sizes, Weinswig says. (SOURCE:

Monday, September 21, 2009

Bye, Bye Prescriptives

It's only been six months since Fabrizio Freda took over as CEO of Estée Lauder, and already he has sent shockwaves throughout the cosmetics industry.

Last week, Estée Lauder announced that it will shut down its 30 year-old Prescriptives cosmetic line by Jan. 31, 2010.
"A core component of The Estée Lauder Companies' corporate strategy is to evaluate, and where possible, turn around underperforming brands with the goal of improving return on investment. After a thorough analysis of the Prescriptives brand, management concluded that the brand's long term business model is no longer viable given the current market environment. The Company is committed to placing as many impacted employees as possible in open positions within the Company"
Prescriptives products will continue to be sold online at to U.S. customers only while supplies last.
Eliminating brands from their portfolio is nothing new for EL, but Prescriptives is a homegrown brand launched by Ronald Lauder in 1979, and one of the largest in retail volume in EL's arsenal. Its closure shows that Mr. Freda is serious about dramatically restructuring the company.
"We believe that the difficult decision relating to Prescriptives will allow us to redirect our resources to key strategic imperatives where we see the highest growth potential," said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies. "Ultimately this action allows us to focus on those areas which we expect to benefit the Company, our shareholders and business partners. We intend to work closely with our retail partners and continue to communicate with our consumers to ensure a seamless transition."
In the May issue of WWD Beauty Biz, Mr. Freda gave a hint to the possible elimination of Prescriptives:
“We are really focused on fixing the underperforming brands,” Freda said in May. “We have finished a review of the brands and have identified which are the brands where we want to invest and which are the brands that today are underperforming by our standards. For the underperforming brands, we have put a specific plan [in place] for the next 18 to 24 months. In the case we are not successful in turning around the brands, we will make different decisions.”

When asked, he declined to identify which brands comprised that list, but emphasized that “small” and “underperforming” were not synonymous in the Lauder portfolio. “Smaller brands, if they have the right productivity per door, are very interesting businesses,” he said in May. (SOURCE:
Prescriptives was one of the top prestige brands in the mid-80s, enjoying prime cosmetic counter real estate in upscale department stores such as Neiman Marcus. But with the emergence of makeup artist cosmetics lines such as M.A.C. and Bobbi Brown in the mid-90s cut into Prescriptives' niche and thus began the brand's decline.

EL maintains ownership of the Prescriptives name as well as all its trademarks and assets. A company spokeswoman says that the Calyx fragrance will be merchandised by the Aramis and Designer Fragrances division.

For Prescriptives consumer support, toll free numbers have been set up in North America (1-877-819-2968, English, Spanish and French speaking), the United Kingdom (0800 088 4168) and the Republic of Ireland (1800 936 080).

(SOURCES:, Estée LauderCompanies Inc.)

(Photo Credit:

Thursday, September 17, 2009

Beyonce Announces Fragrance Launch....And Gets Sued!

(Photo: Kevin Mazur/WireImage)

One day after Beyoncé Knowles announced the launch of her new fragrance, announces that Abercrombie & Fitch Co. have filed a lawsuit against Ms. Knowles claiming trademark infringment:
"The teen retailer alleged in a federal complaint filed Tuesday that a scent with that label would infringe on its own Fierce cologne trademark.

But Coty said Wednesday Knowles’ dual personality would not factor into plans for her perfume, which will be sold in department stores globally and launch in the Americas in the spring.

“We can confirm at this time…that the terms Fierce and Sasha Fierce are not being used as names of a Beyoncé fragrance,” a Coty spokeswoman said." (SOURCE:
A&F claims that a "Sasha Fierce" fragrance would cause a "likelihood of confusion" for consumers. I doubt that. Up until now, most consumers didn't know Abercrombie sold a "Fierce" cologne.

But here's something that made me go WTF?
“A&F’s intent is that all garments that leave the store have the Fierce scent attached to them,” the company’s attorneys wrote.
Now, when I buy new clothes, I like for them to be fragrance-free, and I gather I'm not alone which would explain the company's high negagtive double digit comp. sales.

Instead of worrying about its "Fierce" cologne, Abercrombie needs to worry about the fierce charges of  racism and discrimination that have piled up against them over the years, the latest being the allegation that they wouldn't let a Muslim teen girl wear her hijab because it didn't fit their "look policy". And now they're suing one of the most beloved African American stars in the world over a word?

This won't end well.

Wednesday, September 9, 2009

Neiman Marcus’ Q4 Loss Deepens

Neiman Marcus’ Q4 loss deepens

Atlanta Business Chronicle
Wednesday, September 9, 2009, 10:59am EDT

Upscale retailer Neiman Marcus on Tuesday reported a fourth-quarter net loss that has deepened over the 2008 fiscal year.

Dallas-based Neiman’s posted a fourth-quarter loss of $168.5 million, which is deeper than the $35.6 million loss reported during the same period last year. During the same period, overall sales at Neiman’s hit $768 million, down from $1.03 billion. The quarter included the recording of a $143.1 million pretax impairment charge.

Meanwhile, Neiman’s same-store sales fell 23.4 percent in the fourth quarter.

For the fiscal year, the company reported a net operating loss of $668 million, down from a profit of $142. 8 million. Sales for the year fell from $4.6 billion in 2008 to $3.64 billion this year.

Chairman and CEO Burton Tansky added that the company “tightly managed its expenses,” eliminated $100 million in costs and ended the year with 23 percent less merchandise due to better inventory management.

"Fiscal year 2009 was a very challenging year fo rour company. We quickly began addressing the many challenges we faced due to a sharp decline in our business, precipitated by the downturn in the economy," Tansky said.