Even though it’s an economic nightmare out there today, it’s not exactly all bad news for some retailers and manufacturers based on recent 2nd quarter fiscal reports hitting the media now. Here’s a quick round-up of the latest news in retail and manufacturing:
True Religion seems to keep getting better, not only as a premium denim manufacturer capturing marketshare, but their stores as well. They blew-doors on expectations for the last quarter with an 86% increase in net income and a 78.9% increase in net sales. Sales are now expected at between $242 million and $247 million–$22 million higher than forecasted. One reason could be because wholesale revenue internationally grew 66.3% and their stores grew from 8 to 30 in the last year. They plan on having 39 stores by years-end and are scouting locations in London now. Directors also attribute their success to a shift in their merchandise mix -more high-scale -and their growing ecomm business.
Speaking of denim, Calvin Klein in Europe has contributed to giving parent company Warnaco a boost by 41% due to an increase in the international popularity of the brand with sales up 51%. This, compounded with Warnaco’s direct-to-consumer initatives, have provided the company such an increase.
Puma AG is also hot, despite spending millions in sponsorship and ads for the Olympics. Reported on the eve of the Beijing Games, Puma AG had a .9% second quarter increase with $71.3 million in sales. The breakdown in sales by region for the brand show 17% increase in the Asia-Pacific region; 13.9% increase in the Americas; 7.6% increase in Europe. According to directors from the brand, Puma is able to transcend economic hardships in certain areas due to the fact that it’s become a “lifestyle player.”
Zumiez, another “lifestyle player” as a leading action sports retailer, announced net sales up 12.7% to $31.7 million compared with $28.2 million in the same 4-week perioud last year. However, their comparable store sales decreased 1.4% for the 4-week period compared with store sales last year which increased 9.7%.
PacSun, another top action sports retailer, had a decrease of 3% with sales at $99.1 million compared with $102.4 million during the same period last year.
Iconix Brand Group, Inc. owners of brands such as OP, Candies, Rampage, and Joe Boxer, announced Q2 sales 2008 results: Revenue for the second quarter of 2008 increasaed increased 32% to $51.7 million, as compared to approximately $39.1 million in the second quarter of 2007.
According to Iconix managers, growth initiatives for 2009 include all of their Wal-Mart brands including OP, Starter, and Danskin Now, with a Cannon launch at Sears and Kmart. They are also looking at international ideas for 2009 as well.
Wal-Mart had a 3% comparable store sales gain, however it was short of the 3.4% analysts’ estimate.
Target took a slight hit with comps falling 1.2%, but the big losers were Kohl’s, off 10.4%, Gap, Inc. down 11% (with Old Navy down a whopping 16%), and J.C. Penny down 6.5%.
Other down news comes from Abercrombie & Fitch and American Eagle Outfitters -both down 7 percent for the month, but Aeropostale did well, up 13 percent. Buckle seems to be the one to keep your eyes on for now, with a 20.9% increase.
Interestingly, high-profile bankruptcy’s such as Steve & Barry’s and Mervyn’s also represent certain opportunities. Mervyn’s for example, is trying to restructure fast, close stores that are not making a profit, and repositioning their branding mix. As a mid-tier department store, Mervyn’s does seem as though it should be OK, and some consultants are anticipating a comeback.
Mervyn’s, which has been an American staple, having started in 1949 and now up to 176 stores nationally, was bought by a private investment group including Sun Capital Partners and Cerberus Capital Management in 2004. Many think that Mervyn’s took a hit based on going after the Latino customer too aggressively, although they do, now, do well in areas with large Latino populations. This combined with its merchandizing mix which included Levi’s, Vans, Sketchers, Disney and other brands that were also available at competitors Kohl’s and JC Penny’s were attributed to part of their downward spiral. Part of turn-around talk now is just how Mervyn’s may remerchandise and turn the ship around. Should be interesting which brands they choose to include.