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Greece Doesn’t Like The Tax Man | 25 / 06 / 2008 | 0
Living in Greece, I’ve discovered some things that could use improvement. One pet peeve of mine is that businesses rarely accept anything but cash. Why? Is Greece stuck in the stone-age? The answer is a little bit more complicated. To make a long story short, Greeks prefer cash to prevent tax authorities from seeing that revenue, effectively lowering their tax bill. Here’s the long story: Greece is a country rife with corruption, and tax evasion is a national sport. It’s estimated that between 28 and 35 percent of Greek GDP goes unreported (amounding to 70 billion euros). 25% of Greeks reportedly live on less than 22 euros a day, yet posh cafés are booked full despite selling the most expensive coffee in Europe (espresso shots often sell for 4 euros/$6.20). Greek income clocks in at 80% of the Euro-zone average, hardly a good showing. But if the underground economy of unreported business was counted, Greek income per-capita would fall ahead of the Euro-zone average. This pervasive tax evasion gives consumers more spending money, but it really hurts the public coffers. Tax revenues could conceivable double with more accurate reporting, leading to a reduction of public debt, increased spending on education, and more money for research and development.
Published under: Business, Economics, Europe, Fashion, Gotham, Politics, Technology
American Apparel Being Snapped Up By Funds | 19 / 02 / 2008 | 0
American Apparel (which has only been publicly traded on the AMEX since December) is getting a lot of attention from hedge funds. Some recent SEC filings indicate that Morgan Stanley, Fir Tree, and SAC Capital Advisors each own in excess of 5% of American Apparel (AMEX: APP). SAC has a notable record of finding moneymakers in youth retail, making this development something to watch. Click over to the article at FashionInvestor for more. (Full disclosure: author owns shares of American Apparel both directly and indirectly at the time of this writing.)
Published under: Business, City of Angels, Fashion, Finance
Sales Season Slowdown Showdown | 10 / 12 / 2007 | 0
Domestic Spending Slowdown? Economists and retailers everywhere are freaking over the possibility of a slowdown in consumer spending, and they’re looking for signs of weakness during the oh-so-important holiday season. Americans’ spending is no longer being sustained by cheap credit extended by banks against a home’s rising equity, as real estate sales (and prices) have stagnated. Commentators and economists have been hypothesizing that this would hit the aspirational luxury retailers hardest - Coach and your local suburban-mall Tiffany & Co. are two strong examples of stores that are believed to be the hardest hit this season. Are we in the beginning of a retail slowdown? Read the rest of my article over at FashionInvestor.com to find out.
Published under: Business, Fashion
The LG Shine: Coming soon to AT&T! | 19 / 11 / 2007 | 0
I first saw the LG Shine in Las Vegas at CES, and I immediately fell in love with it. It’s as revolutionary of a design as the famed Chocolate, and it takes the shine to mirror-levels. It’s so chic, so metallic, and so beautiful. I’m so glad that AT&T is finally bringing it to our shores. It seems AT&T has gotten exclusive deals (or is first to launch) with just about every important handset of late. It’s like they’re trying to have a monopoly on sweet phones so that they can charge whatever they want for plans and people will pay it. Seems to be working.
Published under: Business, Cellphones, Fashion, Must. Have., Technology
American Apparel Going Public (Kinda) | 9 / 11 / 2007 | 0
I wrote the following post today for FashionInvestor.com, click here to warp over and read it there:
Endeavor Acquisition Corp. (AMEX: EDA), a blank-check company, has revised its offer for American Apparel due to the fact that sales and earnings at AA have increased significantly since the original buyout offer was made. Dov Charney, American Apparel’s quirky founder, has some newfound reasons to smile, as the agreement brings his annual salary from $1 to $750,000, includes a $100 million life insurance policy, more than triples the amount of shares to be given to AA employees, and allows Charney to hold on to his 55% share of the company. Also, the debt ceiling pre-transaction has been raised from $110 million to $150 million, as American Apparel needs the money to finance the company’s huge expansion. Another new inclusion in this deal is that Endeavor will purchase all of the shares owned by the other American Apparel shareholder, Sang Ho Lim, for approximately $67.9 million in cash when the deal closes. The special meeting of stockholders to consider the transaction is expected to be held Wednesday, December 12, 2007. With the approval of Mr. Charney, the founder and controlling shareholder, this deal is pretty likely to go through, barring any last-minute drug-fueled reconsiderations. Watch out for big moves in Endeavor stock in the next month or two.
Published under: Business, City of Angels, Fashion, Finance
View From My Desk | 9 / 11 / 2007 | 0
We’re making a lookbook for our quarterly Trends focus group, have to page through just about every publication imaginable.
Published under: Fashion, Photography, Seattle
Lululemon Gets Squeezed | 8 / 11 / 2007 | 0
Here’s a short piece I wrote for FashionInvestor.com about Lululemon Athletica’s major price drop recently: “One of our favorite stocks (not to mention a strong, growing brand), Lululemon Athletica, has been getting hammered in the stock market of late. Just over a hour into the trading day, it’s down slightly over one percent at 40.85, a nearly 29% drop from its recent high on October 22nd at $58.00. Why the drop when Lululemon is expanding and growing sales at a lightning-fast pace? A lot of things are weighing on the stock, one of them is profit taking. Those who were able to secure IPO shares at $18 have been selling to cash in on rising shares, some having profited more than 200% in under 3 months. In addition, Lululemon has so much going for it that investors have bid up its shares to a sky-high valuation, and Lulu would need to grow much faster to deserve this kind of price premium. Long term, we still have bullish sentiment for Lulu, but investors beware, whenever you make a big gain, others will often run for the exits to take profit, and this is something you must factor in your decision making.” I didn’t go into further detail about valuation: another big reason for Lululemon’s fall is that it’s priced into the sky by almost any measurement. Forward price to sales is roughly 11, whereas other popular apparel stocks like UnderArmor and Crox sport P/S ratios around 3. Link via FashionInvestor.com.
Published under: Business, Fashion, Finance
Burberry Blues | 4 / 11 / 2007 | 0
I wrote an article on the demise and resurgence of the resilient British marque over at FashionInvestor.com: “I’ve been seeing more and more glamorous people sporting the iconic Burberry (LON: BRBY) plaid pattern lately in and about town, and it’s gotten me wondering if Burberry isn’t in the early stages of a full-scale comeback. Why was I so bearish on Burberry? I saw the fall of the fabled marque in the late nineties; what I witnessed is summed up well by the Wall Street Journal: “Plaid overexposure. In recent years, the company attached its plaid to too many products and its brand image slid, with even British soccer hooligans wearing it. Exacerbating the problem were counterfeit goods.” During some research on the famed British marque, I found that Burberry is currently taking London Fog parent Iconix Brand Group (NASDAQ: ICON) to court over use of its check pattern used in coats and scarves. Burberry developed the trench coat on a commission from the British War Office in 1914, and first used the famous patented check to line its trench coats in the 1920s. London Fog likewise has been using its own similar check pattern to line trench coats since the 20s, so this puts Burberry in a tight position to explain why they didn’t fight it out in the courtroom, say, 80 years ago. We’ll see how it plays out. Via Counterfeit Chic” Check it out at FashionInvestor.com.
Published under: Business, Europe, Fashion, Finance
Coach Stock Falls On Slower Store Traffic | 23 / 10 / 2007 | 0
I penned this article for FashionInvestor.com this afternoon:
Edit: Fashion Analyst TalentedBlonde seems to agree with me: “Look, Coach (COH) is dead. Masstige is getting its A$$ kicked, so go uber-luxe.” She recommends Burberry and JCrew. Link
Published under: Business, Fashion, Finance
Put Your Money Where Your Mouth Is | 17 / 10 / 2007 | 0
Today, I was reminded by a friend that a stock that my fund happens to own, Lululemon Athletica, was up 13% today, and is up over 34% since I bought it. Not to sound pompous, but this comes as no surprise to me. ScarletStorm invests primarily in firms that show outstanding traction with consumers. We do all the necessary due diligence, research, and valuation on each possible investment candidate, but the firms that we end up buying stock of all share one trait: consumers are fanatical about them. I was tipped off about Lululemon months ago by some friends of mine. What they told me was that Lululemon has built superstrong brand momentum with its core market (adult women), that their yoga clothes fit better than anything else (and more importantly, make the wearers look sexier), and that Lululemon clothing demands premium prices that customers are more than willing to pay. $80 for a pair of stretch pants. That’s their core product. Formation of my Philosophy My investment in Lululemon is a reflection of how I’ve been brought up to recognize prudent investments. Early in my life, I was lucky enough to learn a great lesson from my wise grandmother: we were walking out of QFC (a Pacific Northwest-based grocer now owned by Kroger) when she told me that she owned stock in QFC, and that she’d bought it because she likes to shop there herself. I was amazed. Right there in front of me stood a part-owner of the business! That made a strong impression on me, and from then on I would always remember her maxim: if you like spending your money somewhere, buy stock in the company. Building upon her teaching, I adapted a second rule that’s just as applicable: if people you know spend their money somewhere, buy stock in the company. It was this rule that lead to my purchase of some 25,000 shares of LULU late last month. I’m so confident in the business. It’s differentiated from its competition (does it even have competition?). It’s in a growing market. It’s got premium product and commands premium prices. People are really excited when a new Lululemon store opens up, and that buzz increases the visibility of the brand even more. The company hasn’t oversaturated the marketplace like McDonalds and Starbucks have in their respective markets, there is plenty of room to grow. That’s what makes it such a desirable investment. The fact that it generates buzz and gets consumers talking (and gets them spending!) makes LULU worthy of an investment from ScarletStorm. The moral of the story: listen to your grandmother.
Published under: Cellphones, Fashion, Finance
Francois-Henri Pinault: “Luke, I Am Your Father.” | 17 / 10 / 2007 | 0
Francois-Henri Pinault, CEO of French luxury goods powerhouse PPR (owner of Gucci and Yves Saint Laurent) has just been outed by the New York Post as being the father of supermodel Linda Evangelista’s baby, born just last year. This news comes as a shock to many, because Monsieur Pinault and his fianceé, Salma Hayek, have just welcomed their first daughter a month ago. I guess old dogs can learn new tricks.
Published under: Business, Europe, Fashion, No F***ing Way
Bellevue Luxury Shopping Update | 1 / 10 / 2007 | 0
Now that the Canadian dollar is on par with its American counterpart, it’s (sadly) no longer practical for Seattleites to hoof it up to Vancouver and go for broke. Even as Vancouver’s gorgeous new Holt Renfrew opens, there’s still a lot to look forward to in our own backyard. For one thing, The Bravern, Schnitzer West’s bid at building Bellevue’s luxury status, has already confirmed Neiman Marcus as the anchor tenant. Now, Jimmy Choo and Hermès have both confirmed as retail tenants, with Ralph Lauren and Salvatore Ferragamo rumored to be looking into the project. At the same time, Kemper Freeman Jr., the man who created The Bellevue Collection, is also hoping to capture the luxury market. While plans for a Saks Fifth Avenue in Bellevue seem to have halted, Freeman is indeed still interested in bringing luxury retailers to the area, something he’s been planning for a long time. Bellevue Square is about to undergo a much-needed facelift, and even mid-market stores like Banana Republic, Williams-Sonoma, and Pottery Barn will all be expanded. It seems like the sky’s the limit for Bellevue upscale retail. So what does this mean for Seattle? Apparently, a rivalry is in the making. Who will win? The affluent consumer, sans doubt. Part of the problem with the downtown Nordstrom getting Prada RTW would have been the proximity of other stores that carry Prada within two blocks. Namely, Mario’s and Barneys pretty much have Seattleites covered in terms of their Prada needs. Mario’s (just a block over) has carried Prada for quite some time, and their selection consists of several classic pieces that more conservative types like to wear, while Barneys (now across the street from Nordstrom) has a tightly-edited but more fashion-forward selection of Prada clothing. Between these two locations, there may not have been a need to oversaturate the two-block radius around downtown Nordstrom with even more Prada clothing. While there may be enough business to carry Prada shoes at all three of these places, the market for Prada RTW certainly requires a different kind of consumer. 2ND UPDATE: Apparently, Aritzia and Lacoste are both coming to Bellevue Square in the next year, meaning the contemporary market is going to see plenty of growth in Bellevue, with Sway & Cake and Nordstrom’s Via C, Savvy, and TBD departments already carrying many of the same brands.
Published under: Business, Fashion, Seattle
Shopping at Kitson | 31 / 08 / 2007 | 0
Bought some kicks and a gift at the Kitson boutique on Robertson boulevard. There was a Rolls-Royce Phantom parked out front, confirmation that I was in good company.
Published under: City of Angels, Fashion, Travel
Shopping at the Grove | 30 / 08 / 2007 | 0
We went shopping at the Grove, just east of Beverly Hills. Probably checking out Kitson on Robertson Boulevard later.
Published under: City of Angels, Fashion, Travel
I Found a Zara | 13 / 08 / 2007 | 0
I flipped out when I spotted a Zara on Rue Jean Médecin in Nice. Inside, I found a treat in a white-collared baby blue shirt. It’s got that thin collar (barely over an inch thick) for those skinny white ties that we’re seeing so much of on red carpets these days.
Published under: Europe, Fashion, Travel
In The Spotlight: VPL NYC | 9 / 08 / 2007 | 0
VPL is definitely breaking the high-waist look, which has been wiggling its way back into fashion. The strappy, simple ballet-inspired footwear is delicious. I’m a big fan of this blossoming brand. Keep your eyes out for their next collection. VPL, via FashionInvestor.com
Published under: Fashion, Gotham
Seven Sells Out To Corporate America | 27 / 07 / 2007 | 0
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 via FashionInvestor.com
Published under: Business, Fashion
Nordstrom Sells Façonnable to….the Lebanese? | 26 / 07 / 2007 | 0
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 via FashionInvestor.com
Published under: Business, Emerging Markets, Fashion
The Chic Fund Offers Simplified Ownership Of Top-Tier Marques | 22 / 06 / 2007 | 0
The minimum investment is $10,000, and there’s an annual management fee of 2.27 percent. Wonder if they’ll give me a Louis Vuitton briefcase just for signing up? Doubtful. Chic Fund via FashionInvestor.com
Published under: Fashion, Finance
Luxury On The Rise In Seattle? | 20 / 06 / 2007 | 0
Seattle Times Business Reporters Melissa Allison and Monica Soto Ouchi recently discussed the implications of the Barneys relocation on the luxury retail sector in In particular, the location is interesting in how it will reshape shopping in While surely the buyers have chosen completely unique selections, there aren’t many brands names in Seattle that aren’t on offer at at least one other store, one that is also likely to be considered more of a Seattle institution than Barneys has been in the past 17 years. Mario’s, Butch Blum, and of course Nordstrom have all been here longer and gained very loyal customer bases. Barneys customers include a wide array of decidedly fashion-conscious and experimental shoppers, from the visiting tourist who may not be back very regularly, to the fluttery fashionista who only comes in to buy the things she wants and doesn’t feel as much loyalty to any particular store. Barneys may have a stellar shoe selection, but Nordstrom still has more Louboutins and Manolos. Barneys is great, but at this point they’re just another player in the increasingly crowding luxury market. With Neiman Marcus and the Bravern opening in Just how much will the new Barneys influence downtown shopping? It will certainly help polarize the luxury shopping core to the north and south ends of the shopping district, with luxury department store and jewelry shopping to the north and boutique shopping to the south. It will build some prestige and fight the
Published under: Business, Fashion, Seattle
Tom Ford’s Manhattan Diggs | 30 / 05 / 2007 | 0
New York Magazine Article
Published under: Business, Fashion, Gotham
In The Spotlight: Tailorbyrd | 29 / 05 / 2007 | 0
TFI: Is your firm privately-held? Where are you based? Link: TAILORBYRD Website
Published under: Business, Fashion, Gotham, Seattle
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