At the annual ICRXchange for consumer companies held in the beach town of Dana Point, California it’s always jarring to see buttoned-down big city analysts and fund managers look like fish out of water while schmoozing with laid-back apparel company heads in the bright sun.

But even more comical was the sight of an animated, energetic Dov Charney, chief executive and founder of trendy retailer and clothing maker American Apparel, giving an evolutionary lesson to suits and proclaiming himself to be a “monkey.”

The dinosaurs in his business, he explained to the rapt crowd assembled around him, are Hanesbrands and Fruit of the Loom, suggesting that his underwear designs are far more hip.

“I’m a monkey — and the rats are behind me,” he said, referring to those who copy his designs.

His comments prompted one fund manager to label Charney “a character,” something the controversial CEO — whose leadership at American Apparel has been marked by accusations of sexual misconduct — may well have heard before.

Also overheard at the two-day conference, Quiksilver President Bernard Mariette being asked if the company was contemplating acquisitions — this one day after the action sports apparel maker announced a bigger-than-expected quarterly loss due to its unwieldy Rossignol division, which it bought in 2005.

“You got any money?” Mariette asked to laughter all around.

Lastly, it feels like war at the ICRXchange. The requisite swag this year is an oversized camouflage backpack, which makes the attendees look like they’re shipping off for a deployment.

But maybe the battle analogy is not too far off, given the current state of retail in the United States.

(Photo: Reuters)

U.S. retailers looking to set up shop in Saudi Arabia need to prepare themselves for some major differences — including the fact the there are no fitting rooms.

As growth slows at home, some U.S. retailers are looking at overseas markets, including Saudi Arabia, to augment U.S. sales.

But to enter Saudi Arabia they need to work with a partner.

And that partner can explain to a retailer how they should tweak their business to make it acceptable to the local Saudi Arabian market, said Peter Gross and Vishal Jain of Fawaz Alhokair Group. Fawaz Alhokair brings U.S. brands, like Nine West and Gap, to Saudi Arabia.

Jain said the typical Saudi family has five children, and 50 percent of the population is under 15 years old. That means there is a voracious appetite for youth and baby goods, and a retailer opening stores in Saudi Arabia would expect to stock more clothes for children than they would in a typical store in the United States.

How about those racy U.S. ads showing generous amounts of cleavage and torsos? They will need to be toned down for Saudi Arabia, the executive said. Instead, retailers can expect their ads to show clothes on silhouettes.

Gross said stores in Saudi Arabia do not have dressing rooms because women, who wear long black robes and cover their heads in public, will not undress in public, where all the workers in retailer stores are men. Instead, they will try on their clothes at home.

And while they may not be able to flaunt their new fashions on the street, women are eager to flaunt them in the privacy of their own homes, among friends and family, Gross said. 

And what else sells well in Saudi Arabia? Handbags and shoes — two items Saudi Arabian women can show off in public.

(Photo: Reuters)

The most frustrating issue for home decor retailer Pier 1 Imports these days isnt’ the daunting rebuilding effort it’s undertaking, or the skittish real estate and credit markets which are undercutting consumer spending.

For them it’s the media and it’s role in spreading word that a recession may be on the horizon, Cary Turner, Pier 1’s Chief Financial Officer said at the Cowen and Co. consumer conference in New York.

“The biggest frustration we have is the media. They continue to want to keep talking about the ‘R’ word,” Turner said.

Although the current sales environment has been harsh for home decor retailers –  Williams-Sonoma reported disappointing holiday sales and slashed its outlook, while Bed Bath & Beyond warned of a weaker-than-expected fourth quarter – things have been looking up for Pier 1 lately.

Last week it said December sales at stores open at least a year rose 7.5 percent — its strongest December in six years.  And analysts said last month that Pier 1 was starting to show evidence of a turnaround after it cut costs and posted a narrower quarterly loss.

But despite making noticeable strides, Pier 1’s turnaround has a long way to go, according to Turner.

The company needs “to recapture that treasure hunt feeling,” Turner said. “Traffic is a little down.”

Check out the designer free agent market — Big name talent is trading teams for big dollar contracts.

No, it’s not the baseball free agency market. It’s the world of fashion design.
 
Apparel maker Liz Claiborne hired Isaac Mizrahi away from Target Corp on Tuesday, naming him the creative director of the Liz Claiborne brand.
 
The company hopes Mizrahi will revitalize the brand. But the move is a blow to Target, where Mizrahi helped pioneer the concept of designer fashion at mass-market retail chains.
 
Like as the Yankees have been with baseball players, Liz Claiborne has been active in the designer acquisition market. On Monday, it hired designer John Bartlett to revamp the company’s men’s sportswear line for spring 2009.
 
And last year, it named Tim Gunn, host of TV’s “Project Runway,” as its chief creative director. 

Also recently, Gap Inc named New York designer Todd Oldham as the design creative director for its Old Navy chain.
 
You can’t tell the designers without a scorecard.

Also in the basket:
 
At Ground Zero, optimism returns (WSJ, subscription required)
 
Consumer prices see biggest rise in 17 years
 
(Photo: Reuters. Mizrahi on the right.)

High gasoline and food prices and a U.S. housing market that shows no signs of improvement are weighing on consumers’ wallets, with rising unemployment threatening to further slow spending, according to a consumer indicator.

Deloitte & Touche’s Leading Index of Consumer Spending fell to 2.3 percent in the latest month, from a revised gain of 2.61 percent a month earlier, the firm said on Tuesday.

“Increases in energy and food prices are reducing consumer purchasing power,” Carl Steidtmann, Deloitte chief economist, said in a statement. “Higher inflation and unemployment are key risks for consumer spending capacity in the months ahead.”

The index, which tracks consumer cash flow, is comprised of four components: tax burden, initial unemployment claims, real wages and home prices.

While the tax burden was unchanged in November, the index found that growth in jobless claims rose from the year earlier. Rising inflation helped to keep growth in real wages close to zero for the month, but home prices and new home sales fell, Deloitte said.

Check out Sun Capital’s push to take over Kellwood.
 
After having a takeover offer rebuffed by Kellwood management, private equity firm Sun Capital is going straight to shareholders.
 
Sun Capital began a tender offer to buy all outstanding shares of the company for $21 each. Kellwood shares closed on Monday at $16.51.
 
“This refusal to discuss a potential transaction has forced us to take our offer directly to Kellwood’s stockholders,” said Jason Bernzweig, vice president of Sun Capital, in a statement.
 
Sun Capital, which already owns about 9.9 percent of Kellwood’s shares, also said that if an agreement is not reached with Kellwood in the near term, it will nominate its own slate of directors for election to Kellwood’s board.
 
It also said its $21-per-share offer price will be reduced to $19.50 if Kellwood does not terminate its $60 million tender offer for its 7.875 percent senior notes due in July 2009.
 
Also in the basket:
 
Retail sales unexpectedly declined in December
 
Williams-Sonoma holiday same-store sales fall
 
European stores see slowdown, shares hit (WWD)
 
American Eagle plans $250 million to $275 million in capex

Check Out Sears Holdings’ dismal holiday sales and its fourth-quarter profit warning.

The company, which owns its namesake and Kmart stores, said same-store sales in the United States fell 3.5 percent in the key holiday period. The result? Sears is now saying its fourth-quarter profit could be less that half of what it earned a year earlier.

Sears’ troubles follow a long line of depressing sales and profit warnings from retailers, as a tottering economy forces U.S. consumers to cut their spending. These normally free-spending folks are now buying only what they need (and maybe some electronics).

And though consumers will spend, 2008 retail sales are forecast to rise at their slowest pace in six years.

But Sears saw this coming. The company warned in November, after reporting a 99 percent drop in its third-quarter profit, that credit trouble and housing issues could further erode its earnings.

One might remember how Chairman Edward Lampert railed at the media and analysts at that time for underestimating the company.

The market will be listening for what he has to say this time?

(Photo: Reuters)

Also in the basket: 

U.S. retail in a state of anarchy as consumers retreat 

U.S. retailers seen closing stores, paring growth

Blue Nile fourth-quarter revenues up 24 percent

Bain Capital to buy Bright Horizons for $1.3 billion

Wal-Mart small format grocery stores to rival Tesco - Financial Times

It sure looked like it on Friday as U.S. luxury jeweler Tiffany & Co reported a 2 percent drop in sales at its established U.S. stores in the all-important holiday period.

It doesn’t look like investors took the news too well.

Spooked and starting to doubt the strength of the luxury sector, they sent its shares slumping to a 14-month low.

Still, the company said a big “thank you” to tourists during its call with investors.

It looks like those European and Chinese tourists lent a nice boost to holiday sales at its flagship store on the famous Fifth Avenue in Manhattan, and ended up somewhat salvaging its holiday sales results.

Not even the crème de la crème of its U.S. customers came to its rescue, apparently. Sales of some jewelry that sell for more than a cool $50,000 were not exactly sparkling. Possibly, they traded down for the $500-$1,000 silver stuff instead? That category sure did well, according to Tiffany. 

Even Saks noted on Thursday that its customers had started looking for discounts.

Tiffany ended up trimming the top end of its profit forecast for the year and is left mulling uncertain sales trends as it tried to issue a profit outlook for the next year.

So much for luxury staying high and dry.

Blue box, anyone?

(Photo: Reuters)

Check out Best Buy versus Tiffany.
 
As we wrap up the holiday season, one last trend is hammered home: expensive bauble to put on your wife’s wrist? Yawn. Expensive bigger, flatter bauble you can put on your wall to watch sports? Now we’re talking!
 
Best Buy posted a 1.5 percent rise in December same-store sales and affirmed its quarterly profit outlook. No great shakes, but better than many other retailers, who have reported a drop in sales and issued earnings warnings. 
 
Factor out a calendar shift that moved the shopping week after Thanksgiving out of the December period, and same-store sales were up 3 percent as consumers bought flat-panel televisions, notebook computers and GPS devices.
 
Meanwhile, Tiffany was putting the lie to the notion that luxury retailers are immune to an economic downturn.
 
The high-end jeweler said U.S. same-store sales fell 2 percent in the November-December holiday period and cut the top end of its profit outlook for the fiscal year.
 
“We believe a recent pullback in U.S. spending likely reflected a more cautious attitude among customers about the near-term direction of the economy and related factors,” Tiffany Chief Executive Michael Kowalski said in a statement.
 
Even at Best Buy, the sales increase represents a significant
 slowdown from the 7 percent rise a year earlier.
 
Which begs the question of, what, if anything, will consumers be buying now that the holiday season is over?
 
Also in the basket: 
 
Restoration Hardware holiday sales fall 1 percent
 
McDonald’s shares fall amid concern over consumer

(Photo: Reuters)

Abercrombie & Fitch’s Michael Kramer did not say much today, but what he did say — an underwear chain inspired by Sydney — was enough.

In a presentation at a Needham & Co conference, the retailer’s chief financial officer confirmed today that Abercrombie’s 5th concept will be an underwear chain, Gilly Hicks, which will be inspired by Sydney, Australia.

He also said its first store would open later this year in Massachusetts.

It is not immediately clear whether Gilly will focus on the “Rated R” gang, such as American Eagle’s aerie and Victoria’s Secret’s Pink or the “NC-17″ bunch, like J.C. Penney’s Ambrielle or Frederick’s of Hollywood.

But one thing seems obvious. As a way to differentiate itself on an increasingly crowded sales floor, Gilly will probably sell all sorts of boxers, briefs and combinations thereof.

And women will finally understand why men so often choose to wait for us outside the Victoria’s Secret…

(Photo: gillyhicks.com)