GLG News by Warehouse Club Retail Experts

John DuffyPresidentMarketOps, Inc.

McDonald's is Hitting on All Cylinders

October 23, 2006

Analysis of:McDonald's 3rd-quarter outlook beats estimates | today.reuters.com

1.  McDonald's is performing at a high level driven by core growth platforms at home in the U.S. as well as abroad.

2.  The fast food industry itself is starting to show signs of life after experiencing softness over the past year or so.  While maybe not as profoundly as McDonald's,  expect other key operators to experience renewed growth.

John DuffyPresidentMarketOps, Inc.

Baja Fresh Model Flawed from the Start

October 16, 2006

Analysis of:Wendy's Takes a Big Loss on Baja Fresh | www.latimes.com

The restaurant model developed by Baja Fresh is the bigger issue regarding the ultimate loss Wendy's sustained on the sale to David Kim for roughly $31 million.

Wendy's and other fast food operators have shown an inability to profitably grow chains with differing models, most notably those operating in the quick casual segment.
 
Chains that have shone strong value growth have done so through strong same store sales growth based on sound strategic operations.

John DuffyPresidentMarketOps, Inc.

McDonald's Stock Swap Divestiture of Chipotle a Win-Win

October 12, 2006

Analysis of:McDonald's Chipotle offering far oversubscribed | today.reuters.com

1.  The demand for Chipotle shares from McDonald's stock holders signals the strength in the quick casual foodservice market, legitimizing Chipotle as a growth stock for the future.

2.  McDonald's on the other hand is signaling a focus on their bread and butter, the quick-serve restaurant industry, as their stock is enjoying renewed success on the market.

3.  Their decision to cut all ties with its top growth division can also be viewed as a very curious move.

Martin BrillManaging PartnerSweetwater Consulting LLC

The Biggest Trend In the Apparel Industry? Private Label Brands

September 26, 2006

Analysis of:JCP unveils intimate apparel boutiques | www.retailingtoday.com

• JC Penney’s creation of its latest private label brand of intimate apparel, Ambrielle, is emblematic of the most significant trend in apparel retailing.

• In their concerted attempt to promote exclusivity and drive margins, department stores and mass merchants are devoting more floor space to private labels, at the expense of major multi-brand manufactures.

• Earlier this year, Wal-Mart significantly cut the size of its orders on Levi’s Signature brand, to free up “open to buy” dollars for its own private labels.

• Major apparel makers acknowledge that the trend of direct sourcing by their biggest accounts is accelerating at a rapid pace.

• Multi-brand apparel makers like Liz Claiborne and the Jones Apparel Group are countering the private label trend by selling directly to consumers by way of their specialty retail stores and online sales platforms.

• Apparel manufacturers distributing more than 25% of their production to any one retailer are in serious jeopardy of significant hits to their top and bottom line’s – without warning.

Martin BrillManaging PartnerSweetwater Consulting LLC

Luxury Apparel/Accessory Brands Contiue Dramatic Growth

September 12, 2006

Analysis of:PPR's Stellar 1st Half: Gucci Group Propels 27% Surge in Profits | www.wwd.com

• Negative macro-economic factors have had little impact on the leading global luxury brands
• Top European and American luxury brands continue to deliver dramatic sales and earnings growth.
• Gucci and Louis Vuitton remain the star performer’s in the “upper luxury” segment
• Coach's earnings rose 33% for the quarter confirming the strength of their  “affordable luxury” brand positioning.

John DuffyPresidentMarketOps, Inc.

Bob Evans Slowdown Part Demographics, Part Segment Issue

August 30, 2006

Analysis of:Bob Evans Slows Growth | www.globest.com

Bob Evans is dealing with changing demographics that will require a brand overhaul for it to remain relevant.  A focus on new products at both retail and on the menu should help in the turnaround.

The family dining segment has been particularly hurt by sagging consumer confidence and the rise in gas prices, in particular.

John DuffyPresidentMarketOps, Inc.

Aggressive Product Development at the Heart of Wendys Turnaround

August 25, 2006

Analysis of:Wendy’s makeover beginning to pay off | www.columbusdispatch.com

Wendy's made a bold move in introducing their Frescata line of sandwiches and their same store success is a direct result.

The division of Tim Horton's will be spun off through an IPO and the impact on Wendy's will be positive, if they continue their wise investment strategy.

John DuffyPresidentMarketOps, Inc.

Restaurant Slump to Continue as Energy Costs Remain High

August 17, 2006

Analysis of:Restaurant Business in Worst Slump Since '91 | adage.com

Certain segments of the restaurant industry that are most affected by consumer trade-off spending will continue to feel the pressure as energy costs stay high.

While the industry will weather the slump, it is clear that some level of restaurant dining dollars are a direct trade-off with energy and transportation costs for consumers.

Martin BrillManaging PartnerSweetwater Consulting LLC

Jones Apparel Group Must Improve Its Strategic Business Plan

August 17, 2006

Analysis of:Jones Plots Future After Calling Off Sale | www.wwd.com

CEO Peter Boneparth is under pressure to grow revenue and increase earnings at the Jones Apparel Group and must improve the company’s strategic business plan to achieve this goal.

The company needs to re-evaluate its portfolio of brands, especially the moderate sportswear segment.

Improved cash flow, better inventory management and continued cost cutting must be on the front burner.

The Nine West Division needs to improve operating results soon or be sold.

John DuffyPresidentMarketOps, Inc.

A Natural Next Step for Panera

July 21, 2006

Analysis of:Panera Targets Evening Diners | www.panerabread.com

1.  One of the key avenues to drive new growth at a successful food chain is to expand to a daypart that has been underdeveloped.

2.  Growth will tend to come from two key areas - new locations and increase in same store sales.  The single fastest way to grow same store sales is through the development of a new daypart as long as the concept is relevant.

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