Coach Gets Exclusive With Saks and Rumors of a Collabo With J.C. Penney

Saks Fifth Avenue has been tapped by Coach to be the exclusive retailer for the Reed Krakoff line that will debut this fall. This exclusive arrangement will last for six months, after which Saks will continue to have some form of exclusivity when distribution of the brand widens.

But the news that has the fashion blogosphere buzzing is the rumor that Coach may collaborate with J.C. Penney on an accessories collection:

Coach chairman and chief executive officer Lew Frankfort — spotted chatting with Penney’s chairman and ceo Myron E. “Mike” Ullman 3rd at the Mandarin Hotel, scene of Thursday’s night Global Department Store Summit dinner — acknowledged a collaboration is a possibility, but he stressed it would not be under the Coach label and it would have to be a new brand for the new channel. Ullman said nothing after Frankfort made his comment.

So, what will this new brand be called? According to the U.S. Patent and Trademark Office, since December 2009, the company has registered three trademarks: "Ribbon", "Sonoma" and "510". The goods and services that could be launched under these trademarks range from accessories such as handbags, wallets and backpacks, and, in the case of the "510" trademark, beauty products and clothing. Coach aficionados will recognize the "Sonoma" name from the company's Sonoma Collection of the late '90s. Might Coach revive that line for J.C. Penney? Time will tell.


Disclosure: Haute Retail holds positions in Coach, Inc.

HR Quarterly Round-Up: Abercrombie & Fitch, Saks, Limited Brands

Abercrombie & Fitch Narrows F1Q Loss, Expanding Abroad (WSJ): Abercrombie & Fitch Co.'s (ANF) fiscal first-quarter loss narrowed, and the high-priced teen-apparel retailer outlined further plans to expand its presence overseas.

Saks Profit Surpasses Projections on Fewer Markdowns (Businessweek): Saks Inc., the New York-based luxury retail chain, reported first-quarter earnings that beat analysts’ estimates after marking down fewer goods.

Limited Brands Beats Street, Outlook Disappoints (Reuters): Limited Brands Inc., the operator of the Victoria's Secret and Bath & Body Works chains, posted better-than-expected quarterly net income on Wednesday, but the midpoint of a profit outlook fell short of expectations, sending the company's shares down 5 percent.

HR Quarterly Round-Up: Saks, Revlon, Limited Brands

Vintage Revlon Ad From The July 1949 Issue of Ladies' Home Journal

(Photo: Vintage 123)

Saks Fourth-Quarter Loss Narrows As Luxury Demand Heals (MarketWatch): Luxury retailer Saks Inc.'s fourth-quarter loss narrowed after it controlled inventory and expenses and slowed the rate of its sales decline.

Revlon 4Q Profit Up As International Sales Climb (Business Week): Beauty products company Revlon Inc. said Thursday that its profit rose 13 percent in the fourth quarter as reduced expenses, increased international sales and favorable exchange rates more than offset lower sales in the U.S.

Limited Beats Street, Bullish On February Sales (Reuters): Limited Brands Inc posted sharply higher profit on Wednesday that beat Wall Street estimates, and said its February same-store sales would likely be far better than expected.

Saks Drops "Poison-Pill" Plan

From NYTimes.com:

Saks Dismantles Shareholder Rights Plan
December 14, 2009, 6:48 pm

Saks said on Monday it was ending changes it made to its shareholders rights plan last year when it sought to prevent a potential hostile takeover by Mexican billionaire investor Carlos Slim Helu, Reuters reported.

In a statement, Saks’s chief executive, Steve Sadove, said those steps were “no longer necessary” because of a change made last month to its revolving credit agreement, which raised a “change-of-control” threshold to 40 percent from 20 percent.

In November 2008, the upscale retailer, known for its flagship Saks Fifth Avenue store in Manhattan, introduced the changes to protect itself after Mr. Slim reported a stake in the company of 17.8 percent, making him the biggest investor.

At the time, the company said it would distribute one preferred share purchase right for each outstanding share of Saks common stock.

Saks had also said last year that if any individual or investor reached or surpassed a 20 percent stake, those rights would let shareholders buy shares at a 50 percent discount and give them ammunition to block an unwanted overture.

Saks said at the time that the action was intended to “impose a significant penalty upon any person or group” acquiring 20 percent.

Mr. Slim owned 25.6 million shares, or 16.1 percent, of Saks’s shares as of April 6, the most recent date for which data is available, according to Thomson Reuters.

HR Quarterly Round-Up: Dillard's, Saks, Burberry

(Photo: Reuters/Shannon Stapleton)

Dillard's Swings To 3Q Profit On One-Time Gain, Beats Street (WSJ): Dillard's Inc. swung to a fiscal third-quarter profit on a tax gain, but results excluding that were much better than analysts feared as the retailer continued its turnaround effort.

Saks Beats Street, Shares Up (Reuters): Upscale U.S. department store operator Saks Inc. reported a quarterly profit that beat Wall Street expectations for a loss, stoking investor hopes for a luxury market recovery and sending shares up 4.4 percent.

Burberry First-Half Profit Fell 24% But Dividend Lifted (MarketWatch): Burberry reported a 24% fall in first-half profit, with the results buffered by cost cuts and strong demand for its leather goods, but the U.K. luxury-goods group lifted its dividend 4% and expressed optimism for the future.

October Same-Store Sales Roundup

U.S. retailers posted October same-store sales that offered a mixed bag of results, indicating that retail is in for a disappointing holiday season.

Despite total U.S. comp. sales rising 2.1% in October, the largest increase since July 2008 according to the International Council of Shopping Centers (ICSC), 52% of retailers reported October sales that came in below Wall Street estimates, according to Reuters. 

"October results are not going to give investors the overall warm and fuzzy that we're on track for a strong Christmas," said Brean Murray, Carret & Co analyst Eric Beder, "It looks like we're on track for kind of a mediocre season right now based upon October." (SOURCE: Reuters.com)

However, some industry analysts are optimistic. ICSC projects Nov. same-store sales to rise 5-8%, and holiday same-store sales to rise 1%.

The teen retail sector delivered an October surprise to analysts, claiming the "worst performer" title for the month. Aeropostale Inc. underperformed, posting same-store sales gains of 3% vs. the 14% rise analysts' estimated. Comps at American Eagle Outfitters Inc. sunk 5%, missing the 2% gain analysts projected for the company. As a result, shares in both companies dropped 13.6% and 12%, respectively, with Aeropostale experiencing its biggest one-day decline since Dec. 2008.

High end appears to be on the rise with a 1.8% increase in comp. sales in Oct. for the luxury sector, according to ICSC.

“The improvement in the stock market has had a significant impact on the affluent shopper’s willingness to spend as the luxury market has shown its first positive reading since May 2008,” said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers.  (SOURCE: WWD.com)

Saks Inc. reported a comp. sales gain of 0.7% for the month, beating analysts expectations. The luxury chain reported "experienced continued weakness" in their Saks Fifth Avenue stores, however OFF 5TH and Saks Direct flourished. Management projects mid to high single digit declines in comps. for the second half of 2009.

Nordstrom, Inc. delivered a 6.5% increase in same-stores sales for the month, which topped estimates.

October comp. sales for Neiman Marcus slid 6.0%. Same-store sales in their Specialty Retail Stores segment, which includes Neiman Marcus and Bergdorf Goodman stores, fell 6.2%. Neiman Marcus Direct, which includes their online and catalog operations for Neiman, Bergdorf and Horchow, decreased 4.8%.

Abercrombie & Fitch Co. continues to struggle, posting a loss of 15% for the month, slightly worse than estimates.

Macy's Inc. reported a 0.8% dip in same-store sales, slightly higher than the 0.1% decline analysts predicted according to Thomson Reuters. Online sales (macys.com and bloomingdales.com), which were up 34.6% for the month, helped the company's comp. sales by 0.6 percentage points.

Limited Brands, Inc. posted a 4% decrease in comp. sales for October, falling short of analysts' estimates of a 3.1% decline. Same-store sales losses in Victoria's Secret Stores and La Senza, 6% and 7% respectively, helped drive down Limited's comps.

Saks Posts Lost, Beats Wall St. Exprectations

Saks quarterly loss not as deep as expected
Tue Aug 18, 2009 9:23am EDT

CHICAGO, Aug 18 (Reuters) - Upscale department store operator Saks Inc (SKS.N) posted a narrower-than-expected quarterly loss on Tuesday as it trimmed costs while well-heeled shoppers held back from pricey purchases.

Saks' net loss widened to $54.5 million, or 39 cents per share, in the fiscal second quarter ended on Aug. 1, from $32.7 million, or 24 cents per share, a year earlier.

Excluding impairments and dispositions and a gain on the extinguishment of debt, Saks lost 40 cents per share, less than analysts' average forecast of a loss of 52 cents per share, according to Reuters Estimates.

Shares of Saks, which have more than tripled in value from their March lows, rose 7.7 percent to $5.76 in premarket trading.

The recession, an unsteady stock market since September and job losses have curbed consumers' ability to spend freely in Saks' stores. To offset languishing sales, Saks has been cutting costs and trimming inventory.

Sales fell 14.5 percent to $561.7 million, with same-store sales down 15.5 percent.

Saks, which sells designer brands such as Marc Jacobs, Versace and Oscar de la Renta, said the sales decline at its New York City flagship store continued to be steeper than at other existing locations.

The current climate makes it very difficult to predict sales and gross margin performance with any certainty, Chief Executive Stephen Sadove said in a statement.

Saks expects same-store sales to fall in a mid-to-high single digit range in the second half of the year, with the third quarter being weaker than the fourth.

It still expects same-store sales to fall in a low double digit range for the full year. Same-store sales fell 22.4 percent in the first half of the year.

Saks expects gross margins to rise in the second half of the year, partly because it is carrying less inventory.

The company is also cutting other costs. It aims to spend about $55 million on capital projects this year, after spending about $75 million last year.

(Reporting by Jessica Wohl, with additional reporting by Aarthi Sivaraman in Seattle, editing by Gerald E. McCormick)

(SOURCE: Reuters.com)

July Same-Store Sales Roundup

As The Four Tops sang, "It's the same ol' song..." for the U.S. retail industry.

For the 11th consecutive month, U.S retailers reported flat same-store sales, with many missing analysts' estimates. An unseasonably cool July and tax-free holidays pushed back to August, due to the Labor Day holiday falling late, were contributing factors to the decline in sales.

Although sales were down 5%, the results were on track with industry expectations and "consistent with the recent trends seen in May and June", according to Michael P. Niemira, chief economist of International Council of Shopping Centers (ICSC). In a telephone interview with Bloomberg, Mr. Niemera said, “Although July doesn’t look much different than June or even May, I think it will probably mark the turn in the industry towards better performance from here on out".

Apparel and Department Stores continue to be the worst performing sectors, however there were a few bright spots. Gap, Inc. and Macy's, Inc., posted better-than-expected 2nd quarter earnings, sending their shares to rise. Gap's shares saw it's biggest gain since Nov. 21. Limited Brands beat analysts' estimates, which caused shares to rise 15%, it's largest gain since Oct. 28.

Improvements in gross margin and expense reductions contributed to retailers’ ability to report second-quarter profit above estimates, according to Liz Dunn, an analyst at Thomas Weisel Partners LLC in New York. (Source: Bloomberg.com)

The S&P Retail Index rose 1.4%.



Here's the July Apparel/Dept. Store same-store sales roundup:

Limited Brands beat company and analysts' expectations, posting a 7% same-store sales decline for July. The company expects August comp. sales to decline in the high single-digits.

July same-store sales for Macy's, Inc. dropped 10.7%, above Thomson Reuter's analysts' estimates of a 9.1% decline. Total sales for July totaled $1.377B, a decline of 10.7% in comparison to sales of $1.543B for the same four week period ended in Aug. 2, 2008. Minus restructuring costs, Macy's, Inc. said it expects 2nd quarter earnings of $0.15 to $0.17 per share.

Gap Inc. posted an 8% same-store sales decline for July compared to an 11% drop in July 2008. Total sales were $924M, down 7%. Sabrina Simmons, CFO of Gap Inc., said the company expects earnings per share for the 2nd quarter to be between $0.30 and $0.32.

Dillard's comp. sales slid 12% coming above analysts' estimates of 10% declines. Total sales were down 15% for the month to $439,086,000.

Abercrombie & Fitch continues their downward spiral, with same-store sales falling 28% for July. Total sales for the month were down 22% to $236M. The company believes sales were negatively affected by a shift in the timing of tax-free holidays, and later back-to-school dates.

Nordstrom's same-store sales results dropped 6.9%, beating Wall St. estimates of a double-digit decline. Total sales slid 4.1% to $809M.

Saks slightly beat estimates, reporting a 16.3% decline in comp. sales. Analysts surveyed by Thomson Reuters estimated a 16.6% decline. Sales for the month totaled $159.7M, a 14.9% decrease.

Same-store sales for Neiman Marcus were down 27.3% to $195M for the month. Total sales decreased 25.8% to $199M. The company reported weakness across all merchandise categories and regions.

June Same-Store Sales Roundup

An unusually rainy June combined with weak consumer confidence and a rise in U.S. unemployment, lead to the tenth consecutive month of weak same-store sales for U.S. retailers.

With the unemployment rate at a 26-year high of 9.5%, consumers choose to focus on necessities and discount items, forgoing discretionary purchases. This has retailers concerned about the upcoming back-to-school sales, which gives retailers a preview of what holiday sales will look like:

“You’re going to have a lot of the clearance stuff still on the floors, and that’s going to counteract any traction in the full-price merchandise for back-to-school,” Brian Sozzi (analyst at research firm Wall Street Strategies in New York) said today in a telephone interview. (Source: Bloomberg.com)

"It could be a very difficult back-to-school shopping season," Ken Perkins, Retail Metrics president said. "If that's the case, it's going to be a negative harbinger for what we see for the holidays." (Source: Reuters.com)

Here's the apparel retail June same-store sales roundup:

Macy's June same-store sales were down 8.9%, slightly under Wall Street estimates. Results were consistent with management expectations and the company's year-to-date sales trend.

Dillard's reported soft comp. sales for June, posting a decline of 14%. Analysts predicted a 10.4% drop in same-store sales.

June same-store sales for Limited Brands dropped 12%, coming below the company's expectations of a high single digits decline. Wall St. estimated a 7.9% loss. Semi-Annual sales at both Victoria's Secret and Bath & Body Works negatively impacted sales, along with higher promo activity prior to this year's sales events. V.P. of Investor Relations, Amie Preston, said the company expects July comp. sales to fall in the low double digits.

The biggest loser in the high-end/luxury sector was Abercrombie & Fitch, whose June same-store sales plummeted a whopping 32%. Analysts projected comps. would decline 26.6%. Pressure from lower-priced competitors Aeropostle and Buckle has forced A&F to reconsider its stance against lowering prices according to The Wall Street Journal.

Nordstrom beat analysts' estimates, reporting a 10% drop in June same-store sales.

One of the biggest surprises was Saks Fifth Avenue which, after six consecutive months of same-store sales losses in the high double digits, beat analysts' estimates by posting a 4.4% percent dip in June comp. sales compared to their predictions of a 11.8% decline. But don't break out the bubbly just yet. The low sales drop was due to the company's shift of their designer sales event from May to June. So, once again, it's all about the big discount, much to Saks' chagrin.

Neiman Marcus June same-store sales fell 20.8% with the company experiencing weakness across all geographies and merchandise categories.

A Sparkle of Light in March Same-Store Sales Reports

The apparel retail sector has reason to be a little hopeful today. Although retail same-store sales dropped in March, the declines were less than expected signaling an upturn in consumer confidence.

Reuters reports that more than half of the retailers that posted March sales, topped Wall Street estimates. Thomas Reuters' same-store sales index reports overall sales were down 1.8%, thanks to lower-than-expected sales growth from Wal-Mart. However, sans Wal-Mart's figures, sales fell 5%, slightly beating the 5.2% decline analysts predicted.

"The numbers are still soft, but given the deluge of negative news we have seen in the retail space over the last several months, it's got to be somewhat encouraging," said Ken Perkins, president of Retail Metrics Inc. "It looks like there is a little bit of an uptick, some pent-up demand ... for some discretionary spending." (Source: Reuters)

Investors responded to the encouraging news, pushing the Standard & Poor Retail Index up 4.6%.

The Easter shift from March to April negatively affected March sales results:

"The overall tone for March was actually stronger than the reported sales performance," said Michael P. Niemira, ICSC chief economist and director of research. "Sales performance was dampened due to several factors, two of which were calendar related; the first being a calendar-month shift that caused there to be one less Saturday in March compared with last year and the second being that Easter falls three weeks later this year, on April 12, as opposed to March 23 last year," said Niemira. "These shifts created an unfavorable month-over-month comparison with March of 2008. If we adjust for the calendar shifts sales for March were stronger than reported, in fact, up about 1 percent," Niemira added. (Source: ICSC)

Abercrombie & Fitch was the biggest loser with March same-store sales falling 34%, due to the company's continued resistance to discounting their merchandise in order to protect their brand's image. Comp. sales were weakest in week 3 and and stronger in weeks 4 and 5 reflecting the Easter shift. Weeks 4 and 5 were positively impacted by Spring clearance event. Across all brands, jeans, fragrance and fleece were the strongest categories. Comparable sales were down across all U.S. regions and Canada.

Macy's Inc. reported a 9.2% declined in same-store sales for the month of March, slightly beating Wall St. predictions of a 9.3% decline. Online sales (which include macys.com and bloomingdales.com and are included in same-store sales results) had another good month with a sales increase of 17.9% in March and 17.1% year-to-date. All figures were in line with management's expectations. Due to the Easter holiday falling in April instead of March, the company advises that the March-April period should be viewed together.

Limited Brands, Inc. reported March same-store sales decreased 9%, beating the company's expectations of a "low double digit decline" as well as analysts' estimates of a 12% decrease. The company projects mid-single digit same-store sales declines for April.

However, the struggle continues for the luxury sector.

Neiman Marcus was the worst performer in the sector, reporting same-store sales drop of 29.9% for March. The company said it experienced weakness across all regions and merchandise categories.

March Same-store sales fell 23.6% for Saks Fifth Avenue, missing Wall St. estimates of a 20.3% decline. The luxury chain experienced weakness across all merchandise categories, while Saks Direct and OFF 5TH showed strength.

Nordstrom beat analysts' estimates of a 16% decline, posting a same-store sales drop of 13.5% in March. The company reports that while the Nordstrom Rewards triple point event for Nordstrom cardholders had a favorable affect on sales, the positive results were offset by the shift in the Easter holiday from March to April. Rob Campbell, treasurer and vice-president of investor relations, said that cosmetics and junior women apparel were their strongest categories.

Apparel Sales Continue To Suffer Despite Overall Industry Increase

U.S. retailers reported their same-store sales for February and the results were better than expected.

Reports show overall retail industry same-store sales increased 0.3%, beating analysts' predictions of a decline of 1.3%, according to Thomson Reuters. The increase was due to Wal-Mart clobbering expectations by posting a 5.1% same-store sales increase, as well as retailers controlling inventory.

A few retailers beat Wall Street estimates by either posting gains, or posting declines that were less than expected. Aeropostale reported an 11% increase in same-store sales which was higher than the 6.9% increase analysts predicted. Gap Inc. said sales fell 12%, beating estimates of a15.4% decline. Limited Brands Inc., the parent company of Victoria's Secret, dropped 7% which was better than analysts' estimate of a 7.6% drop.

So, is this a sign that the apparel sector is beginning a turnaround? Not necessarily. Despite these bright spots, reports show that apparel was down 5.6% and department stores declined 9% compared to the previous year.

Macy's Inc. reported same-store sales down 8.5% for February, more than the 7.3% analysts predicted but within management's expectations. However, online sales -- which include macys.com and bloomingdales.com -- increased 16.2%.

Luxury retail continues to struggle the most as a result of consumers opting for food and necessities instead of discretionary items like high end clothing. The International Council of Shopping Centers reports February same-store sales for luxury stores dropped 19.2% compared to a 0.1% drop of all the chains it monitors.

Saks Inc. was the worst performer in the sector with a 26.8% drop in same-stores sales in February, experiencing weakness across all merchandise categories, particularly women's apparel. Eveningwear, fragrance, women's and men's accessories and their OFF 5TH stores showed relative strength for the month.

February same-store sales for Neiman Marcus tumbled 20.9% with weakness in across all regions and merchandise categories.

Nordstrom, Inc. reported February sales decline 15.4%, more than the 13.6% drop analysts predicted.

December Same-Stores Sales Results Bring The Pain To The Retail Industry

Well, the December same-store sales results of the nation's retailers are in and it ain't pretty.

Deep holiday discounts were not enough to save the apparel sector. Macy's, Inc. reported same-store sales down 4% for December, less than the 5.3% decline analysts projected.

"The holiday shopping season ended with strong sales in the fourth and fifth weeks of December after a slow start to the month and unfavorable weather conditions in the Northeast, Midwest and Pacific Northwest," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "We went into the fourth quarter with an objective of reducing inventory levels to position us for 2009. We are pleased to have accomplished that objective with approximately 7.5 percent lower inventory on a comparable store basis at the end of December compared with last year."

Ironically, meeting that objective, via markdowns and sales, has caused the company to cut its earnings per share expectations for the fourth quarter ($0.90 to $1.00 per share vs. $1.10 to $1.30 per share) and fiscal '08 ($1.10 to $1.20 vs. $1.30 to $1.50). There are also plans to close 11 underperforming stores.

Luxury stores were hit the hardest, undoubtedly a reflection of the Wall St. layoffs and affluent consumers experiencing major losses in their investment portfolios.

Neiman Marcus, Inc. led the pack with a 27.5% drop in December same-store sales, experiencing losses across all merchandise categories.

December same-store sales for Saks, Inc. decreased 19.8%, almost twice as much as analysts predicted, with weakness in the women's apparel, outerwear, men's clothing and advanced sportswear, women's shoes, and handbags categories.

Coach, Inc., one of the few retailers that did not discount their merchandise, in an attempt to protect their "brand proposition", reported same-store sales for the quarter declined 13%. As a result, earnings expectations for the second fiscal quarter were lowered 3% to $0.67 per share.

Nordstrom, Inc. cited industry wide competitive markdowns as the reason for it not meeting earnings expectations of $0.35 to $0.45 per share.

The biggest surprise was Wal-Mart. The world's biggest retailer reported same-store sales increased 1.7%, but it didn't meet the 2.7% estimate, thus it was forced to cut earnings estimates to $0.94 per share, down from projected $1.07 per share.

Things will probably get worse for retail. Thanks to some retailers not offering discounts, they have an abundance of inventory that needs to be cleared out before the spring shipments arrive. In order to get rid of inventory, they'll be forced to discount which cuts into their bottom line. Combine that with January and February historically being slow because consumers are waiting for Spring collections.