Wall Street is hot right now — even if the economy isn’t — and fashion companies are out selling their stories to investors, trying to catch a piece of the action that keeps pushing the Dow Jones Industrial Average to new highs.
The first day of the two-day Bank of America Merrill Lynch 2013 Consumer and Retail Conference in New York drew a diverse group of companies Tuesday, from Coach Inc. to Wal-Mart Stores Inc.
And each firm has its own path to better returns.
Wal-Mart is trying to make its gigantic store base an asset in the e-commerce game as it works on different ways to get goods into the hands of consumers. Coach continues to draw on its strength as an accessories brand as the company moves to more of a lifestyle positioning. And Under Armour Inc. is tapping into Stealth Bomber technology.
On Wall Street, retail stocks set another new high Tuesday before dipping modestly, while the Dow Jones Industrial Average just barely eked out a gain, and another record close.
The S&P 500 Retailing Industry Group slipped 0.2 percent, or 1.10 points, to 727.03, and the Dow closed up 2.77 points to 14,450.06.
Among gainers that were at the conference were Perry Ellis International Inc., up 3.1 percent to $16.74, and Wal-Mart, ahead 0.9 percent to $73.60. The decliners included Coach, off 1.4 percent to $48.81; The Jones Group Inc., 0.6 percent to $12.06, and Under Armour, 0.4 percent to $48.51.
Here, a summation of key points made by Tuesday’s speakers:
Charles Holley, chief financial officer, Wal-Mart Stores Inc.
• “We saw a slowdown at the end of January at our Wal-Mart U.S. business. It was not disastrous.…We saw sales normalize around mid-February. I believe the slowdown had a lot to do with the delay in [consumers’] tax refunds.”
• “Our total company [capital expenditures] will be flat to down a little bit from the prior year. We spent a little under $13 billion last year and our guidance is $12 billion to $13 billion this year….Back in 2007, just as a reminder, our capital expenditures were $15.7 billion, so we continue to deliver greater efficiency.”
• “We will continue to invest not only in how the customer wants to shop, but how they want to receive the merchandise. We’re still on pilot phases of our same-day delivery for Wal-Mart U.S., but we know we have a very important advantage in our brand and promise, along with the 4,000 stores that are within a very short distance of a large part of the population.”
Lew Frankfort, chairman and chief executive officer, Coach Inc.
• “The difference today from our — let’s call it our new competitors — they did not really shift from apparel to accessories. They built accessories as a major cornerstone of their brand along with apparel and footwear. I’ll just add one other piece that is very important. We are and will continue to be an accessories brand. What we do in the lifestyle side will be anchored by bags and accessories.”
• “In terms of the consumer, things have really not remarkably changed.…We all know that December was a particularly soft month in the United States. January was stronger. Weather affected the country later in January into February and, for those of us who look at weather maps, it looks as if we’re moving obviously into a spring period.”
Brad Dickerson, cfo, Under Armour Inc.
• “Our big innovation story for the back half of this year is ColdGear Infrared, inspired by the Stealth Bomber and its use of ceramic. The technology is designed to keep athletes warmer longer. We use a ceramic-infused ink that is applied to the product much like a graphic T-shirt would work. The added properties allow generated heat to be transferred throughout the product and stored much like a cup of coffee.”
• “Leanne Fremar [senior vice president, executive creative director for women’s] comes from 10 years at Theory and we’ll be opening up a design center here in New York City.…A barrier for our company in the past has been the idea of trying to move people from New York City or Los Angeles to Baltimore. People want to come work for Under Armour, but they don’t want to move….This removes that barrier to some degree.”
Wesley R. Card, ceo, The Jones Group Inc.
• “We were competitively way overpriced [for the Jones New York brand] versus the competition. We’d have jackets in the $200-to-$240 range and some of the key competitors were getting down to the $140-to-$160-type range. So we are there now as we move through spring and into fall.”
• “We’ve been focused on five things pretty consistently…revitalizing the core brands, investing in emerging brands, expanding the international footprint, I think most critically fixing our own chain of retail stores and building on operational excellence.”
Oscar Feldenkreis, president and chief operating officer, Perry Ellis International Inc.
• “We have definitely seen a slowdown in retail in general due to weather in the Northeast and the mid-Atlantic. Many of the retailers, knowing that there was a calendar shift, have moved a lot more of their promotional activities and events [out of February] to March because they came out of the season much cleaner.…January was a strong month, better than December.”
• “We do currently operate 50 Perry Ellis retail doors between outlet and regular price and look at that as a growing opportunity for us.… We currently operate 16 [Original Penguin] stores and have already signed four to five additional doors for this year.…Direct-to-consumer, via e-commerce and brick-and-mortar doors…should be, at the end of the day, 20 percent of our total revenues as we continue to build our brands.”