Unstructured Finance

Liz Claiborne brand ends business in some European markets

apparel.jpgLiz Claiborne is pulling its namesake brand’s wholesale business from Germany, Sweden and Russia, the company said on Friday. The decision affects only the Liz Claiborne brand, which it had just begun to roll out in those markets, a company spokesperson told Reuters in an e-mailed statement.

Liz, along with other brands such as Mexx and Kate Spade, intends to focus on better established European markets such as France, Belgium and Iberia instead of expanding into new ones, the spokesperson said.

The report first appeared Friday morning in trade publication Women’s Wear Daily.

Liz has struggled recently due to falling demand for traditional upscale brands and lower sales from consolidating department stores that increasingly promote their own labels. The company also recently cut its profit outlook for the year.

(Photo: Reuters)

King Corn director feels pinch from taking on industry

king-corn.jpgProducer and director Aaron Woolf’s new film “King Corn” has provoked a rich debate among moviegoers about the wisdom of U.S. farm subsidies, but taking on big corn was so difficult  it has left him poor. 

The film profiles two recent East Coast college graduates, who after reading reports of the declining nutritional value of U.S. food,  move to Iowa to grow one acre of corn.

The neophyte farmers attempt to follow the corn they grow from the field to the plate and don’t always like what they see.  Family farmers tell them that U.S. subsidies and competition from big farms cause them to grow “the poorest quality corn the world’s ever seen.”  The two young men visit Colorado feed lots where scientists tell them that corn feed causes so many ulcers in cows that farmers have to pump them full of antibiotics. They go to Brooklyn, New York where doctors tell them that consumption of “liquid candy” soft drinks made with high fructose corn syrup have helped lead to high rates of diabetes in the city where one in eight people suffer from the disease.

Eschew the Banal at Holiday! Adopt a Vampire Bat!

bat.jpgSo maybe you missed the doorbuster promotions, your family already has a Wii, or the emphasis on the material just doesn’t make your heart go pitter-pat. What then, come the holidays?
As the gift-giving days loom ever closer, a slew of organizations are touting non-traditional gifts, from adopting a lemur to jumping out of an airplane.
According to gift-giving company Excitations, 41 percent of consumers don’t even remember that amazing holiday gift you gave them last year. But maybe funding a Mexico City soccer league, cataract surgery in Ghana, or helping conservation efforts in Angola might not be so easily forgotten.
At the World Wildlife Fund, you can adopt a proboscis monkey, red-footed booby or Galapagos Island tortoise (and get a cute furry stuffed-animal equivalent). At Utah’s Best Friends Animal Sanctuary, you’ll be sure to find a wet-nosed dog, cat, bunny or even goat who needs to be sponsored (our personal feline favorites are the rotund Buddy Boy and the fanged Scooter). 
At http://www.changingthepresent.org, gift-givers can choose their favorite cause, from human rights to disaster relief and landmines. Choices include giving money to fund a cellphone for an African farmer, funding brain cancer research, paying for a child’s cleft palate surgery or helping homeless American veterans
Looking for something more hedonistic? Http://www.excitations.com offers the opportunity to drive a Formula 2000 race car, attend the NFL Player of the Year dinner, take a falconry excursion, or master the art of mixing through a cocktail master class for two.

Gift cards even exist in the realm of charity. At http://www.charitygiftcertificates.org gift recipients can choose their favorite charity in spending their gift from you. 

Happy Shopping! (and don’t forget the lemurs)

Photo from World Wildlife Fund Web Site. 

Street, media ignore Sears progress – Lampert

lampert.jpgSears Holdings Chairman Edward Lampert apparently wasn’t happy with the media coverage an analyst comments following the retailer’s disappointing earnings report Thursday.
“While we were not pleased with these results, much of the commentary in the media and on Wall Street following the results ignores the strength of our company and the progress that we have made,” Lampert said.
Read the entire letter  and tell us if you agree or disagree.

(Photo: Reuters)

URI, Cerberus saga–the update

For those following the United Rentals-Cerberus legal battle, the equipment rental company filed a motion for summary judgement last night, hoping a Delaware judge can quickly rule on the case.

To all interested parties, click here for a copy of the legal filing.

Check Out Line: High-end earnings

tiffany.jpgCheck out earnings on the affluent side
J. Crew beat analysts estimates for the third quarter and posted a surprising 21 percent revenue increase.
The company said its focus on fashion for more affluent customers helped boost revenue.
And speaking of affluent, Tiffany came in  this morning with an 18 percent sales jump, helped by growth in most markets, even Japan, which had seen declining sales. Earnings also jumped, but largely on the gain from the sale of the jeweler’s flagship store in Japan.
An higher-end customer base seems to be working for the companies as a way to avoid the woes plaguing other retailers.
Tiffany is so far pleased with sales in the all-important November-December holiday season, though the vast majority of the holiday business is yet to come.
On the other end of the spending spectrum, Big Lots said it now expects same-store sales to fall in the holiday quarter. The close-out retailer had previously forecast a 1 percent to 3 percent increase.

Big Lots said consumers are focused on deals, loading up on discounted items during their shopping trips and not browsing for much more.

That is problematic for retailers, who sacrifice profits on the discounted items, hoping shoppers will then make an extraneous purchase or two — and salvage their margins.

Daily Briefing: $5 Billion Only Goes So Far

SPRINT LOGO ON DOOR OF NEW YORK CITY STORE.What is $5 billion to Sprint? The number-three U.S. mobile network turned down a cash-infusion offer from South Korea’s SK Telecom and Providence Equity, which reportedly included former Chairman Tim Donahue coming in as CEO as part of the package. Stanford Group analyst Michael Nelson says Sprint has major problems, but liquidity is not one of them.  The New York Times has a copy of the letter sent to Sprint detailing the offer:

“We are prepared to invest $5.0 billion, and potentially substantially more, in new equity in Sprint Nextel to support Tim Donahue as the new Chief Executive Officer of the Company. The $5.0 billion investment would be in the form of a convertible preferred security on standard terms, including a conversion price of 20% above the current market and a non-cash dividend of 3-4%. In addition to our capital investment, we would anticipate being actively engaged at the Board level, with representatives of SKT and Providence joining the Board of Directors.”

JC Flowers is willing to revise its offer for ailing British bank Northern Rock and address two concerns the British government had with its initial proposal, according to a person close to the company. But the Treasury has not returned calls to discuss the issues since selecting a rival consortium led by Virgin Group last Monday, and JC Flowers would consider withdrawing if it can’t discuss the issues.

Breaking up deals – who pays?


Who pays when a deal goes sour isn’t an easy subject to resolve.  Over the past few years, as these figures from Factset MergerMetrics show, its been a one-way trend for leveraged buyouts – the private equity firm foots the bill.

Year               Percentage of go-privates with reverse fee
2004                21%
2005                17%
2006                49%
2007                76%

(These figures are where U.S. public companies are the targets.)

The credit turmoil could change things. Seen as an “opt-out” by buyout shops trying to get out of a deal, sellers are going to be a lot more nervous about agreeing to reverse-break-up fees, lawyers predict. The changing tide could see a resergence of the pre-boom deals which were structured with ordinary break-up fees and financing outs. 

Where’s the Green Christmas?

This was suppposed to be the year of the “Green” Christmas.

Groups from consulting firm Deloitte to nonprofit environmental group Conservation International published surveys saying Americans were looking for eco-friendly gifts for the holiday season.tree1.jpg

According to a survey commissioned by Deloitte, 18 percent of respondents said they would purchase more eco-friendly products this holiday season than in the past, and 17 percent said they will shop at more green retailers.

A survey conducted by Conservation International found that 53 percent of Americans would prefer to receive green gifts this holiday season compared to a traditional gift of equal value. 43 percent said that they plan on giving green gifts during the holidays. 

Do Men and Women Shop on Mars and Venus?

shop.jpgWomen are from Nordstrom, men are from Sears. That’s according to a new study by the University of Pennsylvania’s Wharton School that found different priorities for men and women when it comes to shopping.
As this female reporter and avid shopper knows well, women are “happy to meander through sprawling clothing and accessory collections or detour through the shoe department,” according to the survey.
Men, on the other hand, are not as fun: “Men want to go to Sears, buy a specific tool and get out,” said Robert Price, a member of the advisory board of Wharton’s Jay H. Baker Retail Initiative.
The study, in conjunction with Toronto consulting firm the Verde Group, found that men’s interest in shopping has atrophied after years of being taken care of by women. And they seem to be annoyed more by parking. The top problem that rankled men, according to the survey, is “difficulty in finding parking close to the store’s entrance.”
Women, on the other hand, who represent 83 percent of U.S. consumer spending, are put off when they can’t find help in stores when needed, and value personal interaction with store employees more than men. And if staff make women shoppers feel important, so much the better, the survey found.
But ultimately, shopping strategies for men and women harken back to the cave.
“Women are gatherers. Men are hunters,” said Delia Passi of WomenCertified, a retail training organization that also worked on the study. “Women walk into a store and scan. Men look for a specific aisle.”