Sunday, July 29, 2007

Flava Flav Wears Clocks

This may not come as a surprise to many of you readers, but here's Flava Flav sporting an oversized clock as a necklace/blingpiece. Every celeb (and indeed every commoner) should have a trademark piece to distinguish them from the crowd. That's not to say that outlandish differentiation is encouraged, vis-à-vis Flava Flav (say that ten times fast), but a little something like a conversation piece or subtle, distinctive color trim can transform something conservative into unique.

What do you do to add a mark of distinction to your ensemble? Tell us about it in the comments.

Friday, July 27, 2007

Seven Sells Out To Corporate America

Seven For All Mankind
, the L.A. based jean designer who first popularized $200+ ultra luxury denim, have decided to sell their business to VF Corp., owners of Reef and The North Face, for $775 million. This marks a windfall for Bear Stearns Merchant Banking, who bought half of Seven for $100 million just three years ago, with the sale now earning them a tidy profit of $287.5 million. Though Seven really engineered the explosion of ultra luxury denim, do they have the cachet to maintain their position in the marketplace in the face of strong competition from Citizens of Humanity, Rock and Republic, and True Religion?

Clearly, Seven has carved out a corner of the luxury denim market with its classic fits and trademark indigo blues. The risk here comes from being the classic "incumbent" brand: competition, and indeed innovation, could lead to this 'classic' denimsmith going out of vogue.

Article at NYT.

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Thursday, July 26, 2007

Nordstrom Sells Façonnable to.....Lebanon?

Seattle-based Nordstom (NYSE:JWN) has decided to sell its Façonnable brand to the Lebanese investment firm M1 Group for $210 million. As part of the deal, Nordstrom agrees to sell Façonnable clothing for a further 3 years, and will use the proceeds to focus on its main business, retailing, as opposed to brand-building. Façonnable, a conservative luxury clothier that competes against the likes of Brooks Brothers, was long known to be on the auction block; the acquirer, however, is the surprise here. M1 Group (formerly Investcom) was the first company to IPO on the recently-opened Dubai International Finance Exchange and primarily owns wireless networks in third world countries like Guinea Bissau, Liberia, Afghanistan, Guinea Republic, and Sudan. Wait a minute....REWIND. Sudan? As in Darfur's federal overlord? A third-world cellular operator buying falling-star luxury marque? Something smells fishy here. Upon further inspection, the real owner is Mauritius-based MTN Group, which bought Investcom (and hence M1 Group) last year. MTN Group operates mostly in South Africa, and is also in the cellular business. It's all a tangled mess of ownership from there, involving shady tax shelters in the Virgin Islands. Could this get any weirder?

Anyone have any idea why a cellular business in the third world would want to buy a slightly-lagging shirtmaker? Is this deal really even going to go through?

Article at PSBJ

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Saturday, July 21, 2007

V.F. Corporation: Net Income Down

In an earnings report Friday, V.F. Corporation (NYSE: VFC) reported a decline in net income in comparison with last year's quarter. Blamed on the discontinuation of the Intimate Apparel branch of the company, CEO Mackey J. McDonald reaffirmed strong growth in the other sectors of the company.

One interesting note is that while V.F. brands The North Face and Reef had a successful run in the last few years with Reef's "bottle opener" sandal and North Face's cult/trend fleece lines, investors may be misguided by the strength of these underlying brands. Even with the recent acquisition of outdoor-wear manufacturer Eagle Creek, V.F.'s momentum may be stunted by the lack of continuing growth in some of its more well known brands.

Traditionally, brands like North Face have been a more visible brand for V.F. Corporation as they have integrated into the ranks of younger consumers in the form of North Face fleece jackets. However, it is questionable whether this trend will continue to sustain momentum after almost 3 winter seasons of popularity, and very little product differentiation between them.

Specialized outdoor brands may also rival the likes of V.F.'s brand Nautica, as they close in on the casual-yachting/sailing centric brand. Although still carried by large department stores, it may take a hit from popularity in competing brands such as Polo Ralph Lauren and J. Crew.

Wednesday, July 4, 2007

Shareholder's Meeting Preview: Abercrombie and Fitch

With summer casual fashion behemoths like J Crew (NYSE:JCG) and Ralph Lauren (NYSE:RL) stealing all the thunder lately, investors may have overlooked the inherent strength in the historically well branded Abercrombie and Fitch (NYSE:ANF). Between Hollister, Abercrombie & Fitch, and newcomer RUEHL No.925, these stores cover almost every casual summer fashion niche in the United States.

The expansion overseas of Abercrombie & Fitch in London will most likely provide for potent viral marketing in the European and Wealthy Middle Eastern scenes. The Savile Row plays a critical role in courting the high-end constituency of European consumers, while seeding possible expansion offers from growing Middle Eastern consumer capitals such as the U.A.E., Qatar, and Saudi Arabia.

Although seemingly squeezed lately by the rise of competing brands, Abercrombie's brands are known for staple summer fashion at accessible price points for young adults. I must concede that the inherent risk associated with Abercrombie may be in the slow developments of new products throughout their stores, however this may also be the stability that investors have come to take for granted.

For example, while J Crew's popularity has risen in the last few years, their net profit margin is about half that of Abercrombie's at 6.75% compared with 12.72% , with the Return on Assets being similar.

I would suggest that during the Shareholders Meeting, Abercrombie's historical strengths are reiterated by CEO Michael S. Jeffries, along with an emphasis on potential growth in overseas markets.