Fashion’s pitch to investors at the Bank of America Merrill Lynch 2012 Consumer & Retail Conference centered on omni-channel makeovers, big brands, big opportunities overseas, the high-flying luxury consumer and expense cuts.
And if retail stocks are any guide, investors were lapping it all up.
The S&P Retail Index perked up 1.3 percent, or 7.89 points, to 596.15 Thursday — setting a new all-time high of 597.11 in midday trading as investors grew more confident that Greece would reach a deal with its creditors, ensuring the country would get more bailout funds.
The firms making presentations got their piece of the stock action. Coach Inc., rose 4.6 percent to $76.79, while Warnaco Group Inc. increased 1.2 percent to $56.89 and VF Corp. advanced 0.9 percent to $146.35. Hanesbrands Inc., which updated investors at the conference Wednesday afternoon, rose 0.9 percent to $28.09.
Here’s a look at what some of fashion’s top executives had to say about their businesses at the two-day conference.
Robert Shearer, senior vice president and chief financial officer, VF Corp.
• “In 2011, the Timberland acquisition helped drive our outdoor and action sports businesses to represent 48 percent of total VF revenues. And with a full year of Timberland in 2012, outdoor and action sports should approach 54 percent of total VF revenues.…And by 2015, that number should grow to 60 percent.”
• “At the end of 2011…we had four brands in the portfolio [The North Face, Wrangler, Vans and Lee] with more than $1 billion sales.…And in 2012, Timberland officially joins the list. We’ll have five billion-dollar brands that, when combined, account for about 70 percent of VF’s total revenues. And as you would imagine, they’re also the brands where we’re investing most heavily to drive top- and bottom-line growth.”
Lew Frankfort, chairman and chief executive officer, Coach Inc.
• “North America and Japan represent just slightly under 50 percent of the world’s luxury accessories spend, yet it’s 90 percent of our sales. So lots of opportunities globally.”
• “Our consumer, what…she told us is that she is feeling better about the outlook. Sixty percent of consumers said the economy was either staying the same or getting better, up from 48 percent in October.…We are benefiting substantially from targeting a population that is primarily college graduates. I think most of you know that the unemployment rates among college graduates over 25 years of age is less than half the national average, 4.1 percent. That consumer is struggling a lot less.”
Helen McCluskey, ceo, The Warnaco Group
• “Our business is heavily penetrated in southern Europe, it’s about 45 percent of our European business — trends in Spain and Italy continue to be depressed and haven’t shown any signs of improving. We continue to see strength in northern Europe, in particular Germany and France have been very good markets, that continued into January and February for us.”
• “For 2012 specifically, we expect revenue to grow by 4 to 6 percent, that reflects continued growth in Asia and Latin America. Pretty modest expectations coming from Europe and the U.S. and really an adverse impact from foreign exchange rate. On a constant-dollar basis, we expect revenue be up 6 to 8 percent.”
Richard Noll, chairman and ceo, Hanesbrands Inc.
• “So clearly [J.C. Penney’s] focus on big brands is exactly what we’re all about. The whole shop concept — we have experience, we’ve done it with some other retailers. In fact, we’ve been pinching Penney’s for three years about a hosiery shop and things like that.”
• “I think everybody’s appetite for leverage and risk was a lot higher in 2007 than it is today. As the Great Recession came and then we started to see inflationary impacts coming at us last year that were $400 million, equal to our operating profit, we said this is probably an environment where having less leverage, therefore less risk and volatility, is probably wise.”