Consumer Confidence

Consumer Confidence for the month of July hit a six year high at 112.6. With consumer confidence up that could pave the way for retail stores to post increase sales for the back to school season. With retail experience at L.S. Ayres I know that the back to school season is always a good time for sales and with the boost of confidence it could prove quite favorable for the retailers.

http://biz.yahoo.com/ap/070731/consumer_confidence.html?.v=10

Bad Day

Today seems to be a bad day for the entire market with no exception in the luxury departments. Department stores, specialty retailers, and more are all down a few percent during intraday trading. Now could possibly be a good time to get into the market while it is down because surely the big companies such as Ralph Lauren and Macy's will go back up.

Neiman Marcus Group

On July 12, 2007 The Neiman Marcus Group released June sales information and it looks good! Revenues are up 8.8% compared to June 2006 with the winning departments being designer handbags (what a shock!), ladies fine apparel, jewelry and men's. Neiman Marcus stores must be doing something right and in this luxury era it has to be the products that they sell and the exceptional service they have.

Here is another example of the luxury market still in an upswing.

Information for this blog came from www.neimanmarcusgroup.com

Simon Property

Indiana's own Simon Property seems to be doing exceptionally well regardless of their . The Indianapolis based retail developer is opening new malls in Texas as well as reaping the benefits of rising rent costs; on average the square foot price is $26-$32. Simon is a haven for luxury retailers--from Circle Centre in Indianapolis with stores like Coach and Nordstrom (both great companies to own) to The Fashion Mall on the Las Vegas Strip with every department store desired for luxury shoppers (they don't have the local Sears or Penney's. With such a dependency on these stores doing well they are hoping that consumers keep spending and on luxurious items too.

From Yahoo Finance:
http://biz.yahoo.com/bizj/070718/1492835.html?.v=2

Same Store Sales

Same store sales, the key statistic for department stores were mixed for the second quarter. Same store sales are based on the change in sales in the same stores open at least one year. This shows the company exactly how each store is doing and can be combined to show if the company is growing at existing locations. For the second quarter we have the following results that show same store sales changes and stock price:

Dillard's: -1% worse than analysts expectations
Macy's: -2.7% worse than analysts expectations
Nordstrom: +2% greater than analysts expectations
Saks: -5.6% worse than analysts expectations

Hopefully the third quarter will bring better results to the stores and it is possible with back to school coming up, but if there is a major hurricane it may cause another drop like after Katrina.

Information from Yahoo Finance

Buyout Update

Barney's: The $825 million bid for the department store chain from Istithmar investment group has been beaten by a $900 bid by Japan's Fast Retailing. This could get interesting!
http://www.fool.com/investing/international/2007/07/09/fast-retailings-big-bid-for-barneys.aspx

Macy's: The new Sears? Possibly, rumor has it that Edward Lampert may be interested in purchasing the company. I think a Sears/Macy's combo would be an even worse marriage than what has happened with the Federated/May merger that created nationwide Macy's. I thought the nationwide Macy's would be a good thing, but some people just cannot get over the lost names of Filene's, Marshall Fields and others. A Sears/Macy's creation would destroy any status that Macy's has as being a fine retailer because of the plainess and lower quality merchandise associated with K-mart and Sears. I think this could be good news for other department stores such as Dillard's and the Bon-Ton group of stores because they are the closest things to Macy's and have some prestige.
http://biz.yahoo.com/ap/070706/apfn_macy_s_mover.html?.v=1

Tiffany & LVMH: Nothing new to report on this merger yet.

Another Takeover!

Tiffany's & Moet Hennessey Louis Vuitton

More takeover speculation amidst retailers. This time it is with top-of-the-line companies, Tiffany and LVMH. Monday shares of Tiffany closed up 4% after topping out up 6.8% in intraday trading. Again, this is just speculation and may not ever happen, but I think that it could be a match made in heaven, here's why:

-Tiffany's is headquartered in NYC and LVMH in Paris, both two of the top cities for fashion and wealth, this could be used to increase operating efficiency in the two different markets.

-LVMH doesn't have a fine jewelery segment that I know of and Tiffany's doesn't sell clothing, wine, etc.; here is another way that they seem to match well

-Both are known for extraordinary quality and prestige.

-Finally, I just think it could reduce overhead because they could close stores, cut staff and increase shoppers efficiency by having a stop shop for luxury goods.

http://biz.yahoo.com/rb/070625/tiffany_shares.html?.v=4

http://www.flickr.com/photos/irishclare/108765351/

Barney's Buyout & Macy's Takeover

Barney's:
On June 22, 2006 Jones Apparel announced they have found a buyer for Barney's New York, an upscale department store chain. They reported that a private equity firm out of Dubai will purchase 34 stores and two semi-annual warehouse sales for a nice $825 million. Jones paid less than half that when they purchased the company three years ago.
http://www.marketwatch.com/news/story/jones-apparel-finds-buyer-barneys/story.aspx?guid=%7B233B58DD%2D49A1%2D4290%2DBBEE%2DC1BEF49A2AD8%7D&siteid=yhoof

Macy's:
Thats right! The newly name-changed company, formerly Federated Department Stores, Inc., has been rumored that it may be a target for takeover. Friday Macy's stock ended up around 6.5% due to the speculation of the takeover. The speculation stemmed from the movement of the stock recently and 22,515,618 shares were traded Friday compared to an average of only 6,984,260. The rumor is unconfirmed and who knows the jump volume may be due to insider information about something that is to be released that would kill the stock price!
http://finance.yahoo.com/q?s=m & http://biz.yahoo.com/ap/070622/macy_s_speculation.html?.v=3

With the

Macy's, Inc. Inflated Stock Price

Stull, Stull & Brody among other law firms have filed class action law suits against Macy's, Inc. the predecessor company to Federated Department Stores. The suit states that executives of the company had inflated the stock price between February 8, 2007 and May 15, 2007. The inflation was due to the ommission of the former May Department Stores locations decreasing sales and negative consumer feedback about the name changes that took away stores like Marshall Field's, L.S. Ayres and Filene's.

AOL Finance article "Stull, Stull & Brody Announces Investigation Relating to Class Action on Behalf of Shareholders of Macy's Inc. (f/k/a/ Federated Department Stores, Inc.)" aided to the posting of this blog.

Moet Hennessey - Louis Vuitton

LVMH has recently expanded their wines and spirites division by purchasing a 55% stake of a 450 year old distillery in China, Wen Jun Distillery. Wen Jun is know for the fine white spirits it has produced for centuries and should be a great fit with the luxury wines of Moet Hennessey.

A 22% increase in the dividend based on 2006 was also announced showing the strength of this leading company in the luxury market.

Information for this posting came from the press releases section of www.lvmh.com.

!!AUCTION!!

Luxury products are being sold at the auction recently. Yes, we have all heard of eBay and going to the estate auction down the street, but these auctions are nothing compared to the auctions of Christie's and Gooding & Company. These companies have been selling luxury goods, specifically cars and watches. A Geneva, Switzerland based auction house, Antiquorum, which focuses on timepieces and similar instruments, has seen sales jump over 65% since 2003. Watch brands such as Rolex, Cartier and Patek Philippe have all been popular recently with a 2499 Patek Philippe estimated to go at auction for $400,000 or upwards $1 million for a rare pink gold one. Cars are also bringing premium prices like a 1957 Ferarri 410 Superamerica Speciale with an estimate of $900,000+.

Information for this post came from "Life at the Top" a luxury report special in the June 11, 2007 version of Fortune.

Foot it out of Federated and Sachet to Saks

After the quarterly earnings for first quarter 2007 are in, mid-tier stores like Federated Department Stores, which operates Macy's and Dillards Department Stores aren't looking so good, but Saks is looking as good as the merchandise it sells. While Dillards and Macy's were below investor expectations by 31.5% and 15.8% respectively, Saks was up 18.75%. This continues to show that Saks is highly focused on the right area for retail, and was probably very wise to sell off its mid-tier stores, at a premium I might add, as discussed in Saks Q1 Income Down 86%.

So, join the crowd and lets all Sachet to Saks like we own the place, which we should because they seem to be headed in the right direction!

Who doesn't want something Coach?

Coach, the all-American luxury leathergoods company has been around for years and is just exploding with growth. They have had 20 consecutive quarters with earnings of 10% or higher. Coach stock just dipped with the announcement of dropping the corporate accounts sector and poor margins in Japan. Regardless of these Coach is growing thanks in part to the economy of nations worldwide such as Japan, where they plan to open several stores in 2008. Coach has no debt, excellent products and has proven it can give a good ROI.

So, who doesn't want something Coach whether it be a purse, pair of shoes, or even some stock...you are getting good value for your money and won't regret it.

(Some information for this post is courtesy of "Cash-Rich Coach Still Cheap" on Forbes.com).

Go For the Gold with Tiffany's

Bear Stearns labeled Tiffany's stock 'buy' following an announced that Trian Fund Management LP has purchased a 5.54% stake. Today Tiffany stock closed at $52.61 and is projected to reach as high as $68 because of the recent purchase by the Trian Fund. This looks like a stock to get in now while it is still going up and see what happens and get out after making a quick return to your liking.

Saks Q1 income down 86%

Thats right Saks Department Stores (sks) net income for the 3 months ending May 5 dropped 86% mostly because of the gain of over $60 million when it sold of its mid-level stores (Parisian in Indianapolis) to focus on the luxury market. If you exlude the sale of the mid-level stores, same-store sales were actually up 14.4% (this is the key for management on performance). This shows that the luxury market is hot and companies want to focus on it where the margins are generally a lot better than mid-level or discount items. Information for this blog came from yahoo finance and the following page: http://biz.yahoo.com/ap/070521/earns_saks.html?.v=6.

Ralph Lauren Stock

Have you seen the price of Polo Ralph Lauren stock lately (ticker RL)? It closed today (5/15/07) at $92.19! This price is up from around $60 a year ago. What possibly could be causing the amazing increases? Check out the chart courtesy of AOL Money & Finance.