GLG News by Women's Apparel Experts: Retail Consultants

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.

Allan HaimsPrincipalASER Marketplace, LLC

American Eagle Extends Brand with Fragrance

July 26, 2006

Analysis of:Beauty Beat: American Eagle Jumps Into Fragrance | wwd.com

American Eagle will launch a 2 new fragrances in October - 1st time that they have had a girls/and guys fragrance.
Projected by industry sources at $20 million revenue annually
Strong complement to Aerie intimate apparel

Martin BrillManaging PartnerSweetwater Consulting LLC

Who Will Win The Tough BTS Season In 2006?

July 20, 2006

Analysis of:B-T-S: Back to the Seventies | www.wwd.com

Only a few teenage specialty retailers will hit their sales plan for BTS (third quarter).

Major discount and department stores will run even more aggressive BTS apparel sales than last year.
 
Well executed fast-fashion merchandise plans and sharp price points will be the purchase drivers at the expense of basics.

Martin BrillManaging PartnerSweetwater Consulting LLC

A Gloomy Back-To School and Fall Outlook For Apparel Retailers

July 17, 2006

Analysis of:Rising Interest Rates, Fuel Costs Hurt Retail Sales | www.wwd.com

• Apparel and accessory retailers will take a conservative approach to inventories this fall, as multiple economic factors held down consumer spending in June.
• Rising interest rates, higher gas prices (which are likely to go higher) and a slower housing market are all doing their part in making consumers feel less secure as the back-to school season is about to kick-off.
• Department stores will begin to promote back-to school and fall merchandise earlier than ever, creating margin pressures, which will trickle-down to the specialty store segment.
• Major apparel manufacturers will take a “double-hit,” as orders from mass merchants and department stores are down-sized and the demand for mark-down money (to cover promotional activity) becomes more severe.

Martin BrillManaging PartnerSweetwater Consulting LLC

Federated Flexes Their New-Found Muscle At Suppliers Expense

June 14, 2006

Analysis of:Federated Vendors Hit With 5% 'New Store Allowance' | www.wwd.com

• Federated Department Stores showed little regard for their vendor’s 2006 earnings, by announcing a questionable, and retroactive 5% “new store allowance” for 400 newly converted May Company stores.
• With very few options at their disposal, suppliers are likely to accept this “one time” charge rather than walk away from Federated’s business entirely.
• Although the conversion of the May stores doesn’t fit the industry’s classification of a “new door,” Federated flexed their new-found muscle and told their vendor’s that this charge would apply to orders that were already written to cover operational costs.
• Vendor’s already hurt by the closing of about 60 doors after the acquisition, view this move as highly objectionable and privately worry about further chargeback tactics by the retail giant.

Martin BrillManaging PartnerSweetwater Consulting LLC

Influential Fashion Emporiums are Alienating Petite Customers

June 1, 2006

Analysis of:Where's the Petite Department? Going the Way of the Petticoat | www.nytimes.com

• Reporting declining sales, executives at Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s have eliminated, or drastically scaled back their petite departments, which sell clothes to women 5’4’ or smaller.
• This was done although sales in the U.S. of petite clothing have grown (Nordstrom and Macy’s report brisk sales) to $10 billion which is $2 billion more then the entire women’s jean business.
• According to the U.S. Department of Health and Human Services, the average American woman’s height is slightly less than 5”4’.
• The strong emotional response from petite customers at Saks, with many vowing to stop shopping in there completely, has executives “reconsidering” their decision.
• What must these stores do before they lose their petite customer base?

 

Greg DutterEditorial DirectorFootwear Plus Magazine

Bongo Hooks Laguna Beach’s Kristen Cavallari

May 26, 2006

Analysis of:Bongo Announces “It Girl” to Star in Fall Advertising Campaign | www.corporate-ir.net

• Bongo (Iconix Brand Group) believes celebrity endorsements are still effective. However, a recent industry survey indicates that they may not be as much of an influence with shoppers. 

• But using the “right” celebrity (Laguna Beach’s Kristen Cavallari, for example) could create an image, style and buzz that will drive traffic into retail searching for Bongo clothing and footwear this fall. 

     

Martin BrillManaging PartnerSweetwater Consulting LLC

Goldman Sachs To Advise Eddie Bauer On Sale

April 26, 2006

Analysis of:Eddie Bauer on the Block | www.wwd.com

Potential bidders for Eddie Bauer include strategic and private equity firms. Bids are expected before May 1st. by strategic players such as VF Corporation and Liz Claiborne. Private equity companies mentioned as interested are Kohlberg Kravis &Co. and Texas Pacific Group. The hiring of Goldman Sachs as as financial advisor points to a quick sale of the company.

Martin BrillManaging PartnerSweetwater Consulting LLC

Coldwater Creek Thinks Outside The Box

April 20, 2006

Analysis of:Coldwater Creek Tests New Day Spa Concept | www.wwd.com

Coldwater Creek is not waiting around to reach mature status in 2009 (450 to 500 stores by 2009/10) to find a new vehicle that will leverage their brand equity. While Chico's, their strongest direct competitor, has chosen to develop new retail store brands to sustain corporate growth, Coldwater Creek's day spa concept will intensify their relationship with their customer base and increase lifetime value with a high margin business.

Martin BrillManaging PartnerSweetwater Consulting LLC

Major Stores Reduce Inventory and Their Vendors are Hurting

April 20, 2006

Analysis of:Wall-Mart Roils P&G, Levi Strauss With Plans to Trim Inventory | www.bloomberg.com

Mass merchants headed by Wal-Mart and leading department store chains such as Federated, are reducing inventories and the impact is being felt by the largest apparel manufactures and consumer products companies. The objective for these retail giants is to increase shareholder value by reducing working capital needs, increase stock turns, and provide greater flexibility to develop private brands.

The apparel industry has moved to off-set this changing paradigm (as well as merger-driven store consolidation) by developing specialty retail stores for various brands, online sales and expanding their global reach through joint ventures. In order to perpetuate wholesale growth, major suppliers are facing the daunting challenge of complying with the demands of their largest customer’s, while achieving their profitability and growth forecasts.

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