Contributing Member of the Consumer Goods & Services Councils

GLG News by this Author

My Macy's Program Isn't a Strong Reason to Own Macy's

September 22, 2009

Analysis of:Macy's climbs as analyst upgrades to 'Buy' | finance.yahoo.com

A Citi Investment Research Analyst upgraded Macy's to Buy stating that she believes the company's My Macy's program "should lead to improved top line (as well as margin) trends ahead, particularly beginning in 2010." It's a program that empowers the stores to make buying and planning decisions. While this may sound like a good idea, in my opinion, it isn't. I believe it's a dilutive strategy that encourages management by committee rather than through strategic direction and brand focus.

Forget About Same-Store Sales, Look At Inventory & Promotions

December 8, 2008

Analysis of:November Sales Raise Holiday Anxiety | www.wwd.com

The leading indicator used to determine the condition of the retail environment for stores like Saks Fifth Avenue, Macy's, Target, and Abercrombie & Fitch are same-store sales. This is a weak indicator at best in the current consumer climate. Markdowns and promotions are enormous going into November. Comps are holding up because stores are giving merchandise away. I believe that in general, the stronger the comps, the worse the margin, and the lower the earnings.

Survival For Saks Is Daunting

November 19, 2008

Analysis of:What’s Not Selling at Saks | blogs.wsj.com

Consumers have all but stopped shopping. The only hope a retailer like Saks has at this point to survive is to turn all it's inventory into cash, get as much support from its vendors as possible, cut all its costs in half, and hope consumer confidence begins to stabilize. Saks and other retailers have never experience the declines in business as they have seen recently.  Comparable-store sales at Saks declined 5.9%, 10.9% and 16.6% in August, September and October respectively. I believe November comps could be twice as bad as October, and December could be worse still. This is all about survival.

Price Deflation On Luxury Brands Like LVMH, Burberry And Gucci Will Likely Pressure Aspirational Brands Like Coach (COH).

November 18, 2008

Analysis of:In Rare Move, Luxury-Goods Makers Trim Their Prices in U.S. | online.wsj.com

Many luxury brands are reducing prices going forward as the dollar strengthens to the Euro and demand constricts. The combined effect of Strong Euro/High Demand skyrocketed luxury goods prices during the past few years. But retail prices coming out of Italy and France from luxury brands could decline more than 20% in the next 9 to 12 months, while aspirational brands producing out of China/Asia will see little, if any, pricing maneuverability. Aspirational brands look to be facing big challenges even when the climate improves because key luxury brands can more easily adjust pricing and work aggressively to gain traction in the new economy.

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