Canaccord Genuity on Retail: Footwear & Apparel - Canvas Dominates the MAGIC Show (SHOO, DECK, NKE, JWN)
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Rating Summary:
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Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
Rating Summary:
7 Buy, 1 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
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Canaccord Genuity on Retail: Footwear & Apparel - Canvas Dominates the MAGIC Show
Analyst, Camilo Lyon, said, "The color and canvas themes for spring 2013 dominated the Project and MAGIC shows. Consistent with what we have been seeing (and writing), color has exploded into most every brands’ lines we perused. In addition, we saw an inordinate amount of canvas footwear across
many booths. Clearly, the canvas casual trend is taking from Tom’s lead. To that end, we believe Steven Madden (Nasdaq: SHOO)(BUY) is well positioned to capitalize on this trend via its casual lifestyle brand Superga as it is a higher-end heritage sneaker brand that is displacing comparable brands like Jack Purcell (Converse/Nike (NYSE: NKE)). While small to SHOO’s business today (less than ~$10M in sales), we believe Superga’s high growth prospects could quickly accelerate."
"...Tom’s is introducing a fall/winter line in 2013 ($98-$198 price points) to complement its largely spring/summer business. Considering that Tom’s is the #3 best selling brand at Nordstrom (NYSE: JWN) across all departments, we believe retailers will happily make shelf space available and commensurately displace other brands. In our opinion, Deckers (Nasdaq: DECK)(HOLD) is at risk as the UGG brand is facing its share of well-documented challenges. Conversations we had with independent retailers confirm our thoughts that they are reluctant to commit to increasing UGG orders, especially with more alternatives present (e.g., Sorel and Tom’s)."
"Handbags are also performing very well. With the only definable apparel trend consisting of colored denim, we believe footwear and accessories/handbags will continue to work this holiday season due to newness and embellishments that complement the look."
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Analyst, Camilo Lyon, said, "The color and canvas themes for spring 2013 dominated the Project and MAGIC shows. Consistent with what we have been seeing (and writing), color has exploded into most every brands’ lines we perused. In addition, we saw an inordinate amount of canvas footwear across
many booths. Clearly, the canvas casual trend is taking from Tom’s lead. To that end, we believe Steven Madden (Nasdaq: SHOO)(BUY) is well positioned to capitalize on this trend via its casual lifestyle brand Superga as it is a higher-end heritage sneaker brand that is displacing comparable brands like Jack Purcell (Converse/Nike (NYSE: NKE)). While small to SHOO’s business today (less than ~$10M in sales), we believe Superga’s high growth prospects could quickly accelerate."
"...Tom’s is introducing a fall/winter line in 2013 ($98-$198 price points) to complement its largely spring/summer business. Considering that Tom’s is the #3 best selling brand at Nordstrom (NYSE: JWN) across all departments, we believe retailers will happily make shelf space available and commensurately displace other brands. In our opinion, Deckers (Nasdaq: DECK)(HOLD) is at risk as the UGG brand is facing its share of well-documented challenges. Conversations we had with independent retailers confirm our thoughts that they are reluctant to commit to increasing UGG orders, especially with more alternatives present (e.g., Sorel and Tom’s)."
"Handbags are also performing very well. With the only definable apparel trend consisting of colored denim, we believe footwear and accessories/handbags will continue to work this holiday season due to newness and embellishments that complement the look."
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