Fashion & Lifestyle from HETAIL


Smart ways to honor, or apologize.


Assiduously edited by TWIG & GRASS



Confronting My Pessimism

Friday, November 28

To get a gauge of this "Black Friday" business, I took a stroll around my neighborhood shops to get an idea of consumer enthusiasm. I live in downtown Chicago, so my "neighborhood" shops, along Michigan Avenue, Oak Street and State Street, may differ from yours, but I tried to be as comprehensive as possible.

Please note, Michigan Avenue is universally considered on of the world's top ten shopping addresses, so expectations were higher than normal.

I captured the afternoon on film to share with you and all pictures were taken between 1pm - 230pm, usually the busiest time of day.

Click on pictures to enlarge for better detail:

Pessimism be damned! UGG Australia has a rope line to get in. Average wait: 15 minutes

Optimism squashed, I notice there is not one person in the check out line at Urban Outfitters:

Kate Spade was trumpeting their $50 price point ON OAK STREET!

The undeniable elegance of Trabert & Hoeffer:

Even Luxury houses such as Chanel and St. John were pushing Sale, it's not even December for goodness sake:

Louis Vuitton is always bubbling with enthusiasm:

A While the 6o-foot Christmas tree at the 900 North Mall is always breathtaking,

The Lack of foot traffic to get in the mall left much to be desired, 

For even Santa was feeling a bit forgotten today (notice there is no line at the bottom right of the photo:

People were not fighting to get in Neiman Marcus:

Or Saks Fifth Avenue

But crowds at Apple let me know iPods, iPhones and Macs are still on everyones wish list: 

The overflow crowd at Garmin let me know there are still lots of people trying to find their way in the world:

There were two separate massive protests. One for Chicago Public School Funding picketing in front of Water Tower Place:

Another against wearers of fur marched, about 500 strong, up and down the Avenue:

They had a few escorts too:

But DJ in the window at Nike Town was there to remind everyone, the Holidays are about peace:

There were a few very serious shoppers out:

But the overwhelming majority of people, as evidenced by these crowd shots, were walking around empty-handed. And that's after the stores had been open for well over 5 hours:

So with such photo evidence, I need not wait until Monday's reporting period to say this weekend is hinting at Waterloo. I will post Saturday on "What's Next", so look for that.

Since it is the Holiday Season and I want to end on a high note. Treat yourself to one of life's great treats.

If you are in the vicinity of the Peninsula Hotel, just a block west of Michigan Ave. at Superior, there is no way you should pass up Pierrot Gourmet's, WORLDS BEST HOT CIDER!

They regulate the temperature of the cider to the outdoor temp. So if it is very cold, the cider is made very hot. However, if the temp is more mild like today's lows 40's, the cider is served hot, but at a drinkable temperature.

The crew knows a bit about the temperature because the drink stand is OUTSIDE the restaurant. Warm friendly faces and attitudes to match make this a stop every Chicagoan and tourist should put on your schedule.

The Hot Cocoa, served with a semi-sweet chocolate plastic stirring spoon, also cannot be beat.

Notice also, they maintain their 5-Star standards (hello authentic sterling silver carafes), even outdoors.

So even if you cannot afford the splurges of holiday's past, you can always afford to treat yourself to 10 minutes of civilization, if only in the form of a warm drink in your belly.

The Economy and Violence

Desperate times bring desperate measures.

Why would anyone expect a rational, calm public in the eyes of the worst economic crisis facing the country in seventy-five years.

These are just a few articles plucked from the headlines HALFWAY THROUGH "Black Friday". 

Click the headline to go through to the full original story:

This is only 5 hours into the day. Once editorial staffs report to work and reporters start to file their stories, the list, unfortunately, will grow exponentially. 

If you are a reader of this blog I would like you to remember two things this holiday season: Be Smart and BE SAFE.

The Coldest Winter Ever

Thursday, November 27

"Habit is habit, and not to be flung out of the window by any man, but coaxed down-stairs a step at a time."
-Mark Twain (Pudd'nhead Wilson)

Americans, like all people, are creatures of habit. The greatest difference in the American habit and those of other cultures, is our national habit is shopping. We like to spend. What one owns, or wears, or drives, or goes to school, or lives, or vacations, or get their hair cut, or gets married, or goes to eat when dining out defines them in American Society. 

Oft times we make the mistake of believing it's how much money a person makes that defines them, which may be true to a small few. However, for the rest of us, that too is just a means to an end. We want to make money, so we can turn around and spend it. This is why Americans are the most debt-riddled people in Western Civilization. We know what great is and we deserve it, right?

This is the unshakeable truth that the financial markets have been faced with since late-August, when small fissures in the credit dam began to express themselves. Around the clock internal meetings ensued at most large banks around the world, as their leadership began to prepare reporting 3rd Quarter figures to the world. "My God, we will be the laughing stock of the banking community", they thought. For not even the sharpest of pencils, that means you Jamie Dimon, could have thought their situation was not unique.

As the reporting period began in early-September, the trickle of bad news began to emerge. Massive mortgage debt, record foreclosures, delinquent car loans leading to widespread repossession, individual credit-card payments slowing down, record personal bankruptcy filings, small business loans having to be renegotiated, large commercial real estate loans being defaulted on and massive insurance pay-outs from Hurricane Ike. For the trickle was now a full blown tsunami. 

The markets, being unprepared for such overwhelming bad news, and from so many different arenas, did what anyone would do in such situations, it collapsed.

While I cannot profess to have lived through the market crash that started "The Great Depression", I can say for certain, there were never less stable days in America, financially speaking, than those of September 15-17. That is, of course, excepting those of October 1-10 when they New York Stock Exchange (and thusly the American Investment community) lost 22% of it's wealth.

The uncertainty of those days in mid-September days produced a plethora of bad ideas as to how to fix the problem (hello $800 billion bailout). However, two main ideas that emerged are what now clearly going to have major negative, long-term repercussions for the American public.

The first idea was the focus by the Federal Reserve and the Treasury Department on how to stabilize the markets until Thanksgiving, a time when most Americans stop paying attention to affairs that do not involve their families. Usually, market "corrections" happen in October, which gave rise to this dandy from Mark Twain:
"October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February."
Every economist is trained as to how to deal with such problems and the entirety of their training matrix is based on the dreaded "October Surprise."

What threw Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, was the "surprise" came not only in September, but early-September. This meant all their training on how to control a downturn for 4-6 weeks, was staring down the barrel of a finish line minimally 11 weeks away. This is what created so much uncertainty. And said uncertainty is what really rocked the market harder and harder as time wore on.

The Financial Market's hare is now coasting to certain victory, while the Economy's turtle plods along. 

Well, now that the hare is finally and exasperatedly near the "finish line", prepare for the fan to start kicking out a rather familiar foul odor. Bad news, even in great economic times, is saved and distributed, like so many secret santa gifts, for the period between Thanksgiving and Christmas. 65% of all lay-offs happen during this period, most companies that are going to change leadership do so, companies settle lawsuits that have dragged on for years and the like. All because they know that spirits are high and we are not paying attention. 

Unfortunately for most, attention will be payed like no time in our prior history a a nation. Hopefully, we can bear the weight of what is surely coming.

The second and more unfortunate idea to emerge is the unbelievably misguided theory of the core problem afflicting the economy, bad mortgages. That is a problem, but one that has been silently stalking us since late-2003, early-2004. Bad mortgages were a problem before they starting lending to sub-prime borrowers. Tales of bus drivers taking out loans to buy million dollar homes with swimming pools are greatly exaggerated. Bad debt was spread around in many directions.

Start-up small businesses were given billions of dollars in bad loans. The evidence is on display in every American neighborhood, expressed by the growing number of "Store For Rent" and "Commercial Space Available" signs on display. The unfortunate reality of their failure is a great many of these new small business owners leverage their homes to borrow for the new enterprise, making a bad situation into a crisis, all in one fell swoop.

Large Corporations were given massive loans to re-tool factories and invest in additional materials for a burgeoning market that did not, and does not, exist. This is the problem that expressed itself in the form of the trouble Ford and General Motors finds themselves in at the moment. Both have invested in infrastructure for 2009 model-year cars, when both have seen 2008 inventories balloon well beyond record levels.

These examples are just a small glance at the behemoth clogging the pistons of America's Economic Engine. However unseemly all these scenarios appear to be, the real core issue affecting everyone in this country, every company in this country, every trading partner with this country, is credit.

We are a credit society. We have been a credit society since at least the dawn of the 1980's, and a case could be made for earlier. Before then, people who wanted things, saved up their money and bought those things, or did well enough without them. Television re-runs of Archie Bunker yelling at Edith about her spending the family savings on a new dress, do not ring as credible or accessible to anyone under 40 years of age. Today's sitcom is more inclined to revolve around a wife hiding a credit-card bill for something she has already purchased. Herein lies the problem, fully and naked-as-can-be.

Americans have been resistant to living on a pay-as-you-go economy. Families forced to do so would surely have dramatic lifestyle changes. Older (I'm sorry, Certified "Pre-owned") cars would be di rigeur, hand-me-downs would a more familiar reality and, while I can't say they would not be as beautiful, family homes would be much, much smaller than they are at present. Think about it, when was the last time you met a kid that shared their bedroom with a sibling. How about the last time you saw a kid on television share a bedroom. Large is who we have become, in lifestyle and as individuals.

Businesses are in the same boat. When facing pay-as-you-go economics, the ability to adjust to a rapidly changing marketplace are fantastically diminished, almost to nil. Every bet, and I mean that literally, has to be a correct estimation, which pays off in expected dividends or beyond. The smallest misstep would create a cascading snowball effect, damaging the company in ways that would threaten it's existence. This would naturally lead to much more cautious leadership, less innovation and winnowing of options in the consumer marketplace.

This is a very realistic depiction of the American future should Financial Institutions continue upon the path of "correction they are on. The problem facing this country is the lack of available credit to the individual. Unsold housing inventory, as well as automobile inventory continue to swell, due to the Financial Community's decision to sit on it's hands and not loan money at present.

There is certainly a conversation in the offing for American's and American Business Leaders, about how to manage our existence within new boundaries. However, no is not the time.

This Holiday Season is going to be hard on a bunch of families, which means it will trickle up to have a tremendous negative impact on Retailers. This Thanksgiving weekend is the movie trailer to a new, terrifying Horror classic in the name of December.

Recognizing the "stakes" will not be enough for the Fed and Treasury. Identifying the problem on the ground and re-stimulating those at ground zero is the only way out of this economic morass. 

Turn the pipes back on!

The End of Retail in 401k Portfolio's?

Thursday, November 20

Disclaimer (This article is using information based on end of day figures for the NYSE on 11/19/08).

How can this be?

Is it really possible that I am seeing the very evaporation of the industry I have loved for so long? 

I have written, since this site's inception, about the looming clouds on the Retail Industry's horizon, and have spent much time assisting various companies with their preparedness for the storm.

I was, however, completely overwhelmed when I took a peek at my sample portfolio this evening and noticed the stock prices of some truly bell-weather companies.

Here are a few examples (if your jaw is not already on the floor from peeking at the chart on the right hand side of this post):

  • Revenue: $3.2 Billion 
  • Stock Price: $ 3.12
  • Market Cap: $442.73 MILLION DOLLARS!!!!!

That means this company, known around the world as one of America's premier destinations for luxury shopping, is worth less than Bebe. Bebe's revenue last year was 687.6 MILLION, just over 1/5 the revenue of Saks.

  • Revenue: $ 8.8 Billion
  • Stock Price: $ 8.98
  • Market Cap: $ 1.93 Billion

Seems like a lot compared to Saks, but wait. This company had an $8 Billion market cap on September 19th, that's AFTER the market meltdown started. Additionally, the market cap this February was $10 Billion. 

To illustrate how ridiculous this is, consider:
Urban Outfitters is worth $2.23 Billion today, while they produce LESS than 1/5 the revenue and 50% of the income as Nordstrom.
Expedia (Yes, THAT Expedia!) now has the same market cap as Nordstrom. So world class service, taught, as a model, at every major business school in the world and an inanimate lawn gnome are "equal value"? Give me a break.

  • Revenue: $26.3 Billion
  • Stock Price: $ 5.68
  • Market Cap: $ 2.4 Billion

Macy's. World renowned Macy's! The famous star Macy's! Miracle on 34th Street-Macy's! The one that does OVER $26 BILLION DOLLARS A YEAR - Macy's, now has a market cap of $2.4 Billion?

Would you like to know another company that does around the same amount of revenue?

McDonald's, which does a little less, $22.8 Billion.

Would you like to know McDonald's market cap? 


They, like Nordstrom, could be bought out by the likes of Urban Outfitters ($2.23 B) if they accepted stock swaps in this crazy environment.

Lastly, I would like to discuss perhaps the most perplexing thing taking place in the retail world right now. That would be, "What in the heck is going on with Border's Group?"

Here are the relevant numbers for Border's:
  • 547 Border's Super Stores
  • 476 "Other" Stores, including Waldenbooks
  • 114 Paper Chase Stores

  • Revenue: $ 3.7 Billion
  • Stock Price: $ 1.78
  • Market Cap: $107.8 MILLION!!!

This is a company that distributes media to the world. Books, DVDs, magazines, journals, compact discs, newspapers, maps, toys, calendars, games and everything else the Paper Chase store-within-a-store shops sell. They have, obviously, a quite formidable competitor in Barnes & Noble, however I have rarely been in a Border's store around the country (airports included) that was not packed!

So it strikes me as odd that the market cap on this company now sits at one-fifth of Gymboree and one-sixth of TiVo, even though they do 1/3 and 1/10 the revenue as Borders, and are not in the business of distributing such an essential product.

What is going on here is simple. The market is betting against the futures of these venerable institutions. They trying to tell us what they see the future to be. 

I have been very clear, but cautious in my warnings for all retailers this holiday season. I have even included commentary on a few of the four companies chronicled in this article. However, I have never once imagined a retail landscape WITHOUT any of these companies being included. I just cannot foresee that dark an outlook.

Wall Street may have it right in the end. They are scaring off plenty of fund managers who control the retirement funds of tens of millions workers. They are sending shivers down the spines of the employees of these companies, forcing many to rethink, and extend, the time lines of their planned retirements. In a nutshell people are obviously running in the other direction.

But I say, YOU ARE WRONG! I certainly anticipate a tough road ahead, but in the end, this will all shake out. These companies are not as mismanaged as you believe. And, while you may think you know fighting spirit in the Financial Sector, Retailer's are used to weathering the toughest of times AND coming out on top. 

Anyone that doubts this can look at use my market indicator:

You haven't seen Retailer's asking for bailout money.

Rising to the Occasion

Monday, November 17

November has, so far, been a better month for Retailers than some (self included) had forecast. There are several ancillary factors that worked in merchant's favor this year. 

For instance: 
  • A very late Thanksgiving (27th) which enabled tamped down expectations for the first half of the month.
  • The market starting it's meltdown in September allowed ample time for stores to cut non-advertised holiday orders and slash prices in time to counter-balance consumer fears about spending.

These things, and others, have led to a better than expected, though still tough, start to the month and has many retailers feeling they may emerge from this holiday season with a "win."

Such thinking is nonsense. As stated in previous posts, this is the toughest environment facing the Retail Industry in over 30 years. Those that are banking on things remaining on the same tracking lines of what has happened in their stores so far in November are in for a rude surprise. They are much akin to those few, grainy people you could barely make out in the videos before the tsunami hit Thailand, walking out on the exposed surf to see where all the water went.

While many can take pride in what has happened thus far, here are a few realities to consider:

  1. There were 240,000 jobs lost in the United States LAST MONTH! This does not include part-time workers, those that saw drastically reduced hours, or those that are considered "contract workers."
  2. Citi-Group has announced plans to cut 52,000 people from their workforce, in addition to the 22,000 already in the works. That is from ONE company. Now they are the first to "jump" in the troubled financial sector, surely others will follow suit rather soon.
  3. The Technology Sector announced 70,000 lay-offs in the 3rd Quarter alone, and expect another 40-50,000 before years end.
  4. Circuit City  is closing 150 stores and has filed for bankruptcy, and Best Buy has issued warnings about holiday expectations. However lost in the chatter is the story of Tweeter. This company with well over 100 stores has gone belly up without any fanfare. All this happening in what many consider to be the strongest segment of the Retail Sector, consumer electronics.
  5. The onslaught of bad press regarding gift-cards this year. Every newspaper and broadcast news program has done a segment warning people of the "dangers" of buying gift cards. This will kill off a significant portion of the late-December to January traffic, of people looking for bargains, we have come to expect in years past.
  6. The tightening credit markets, which have not yet fully expressed themselves with regard to the consumer credit-card market yet, but it is coming.
Add to this:
  • Retailers cutting prices fully 2-3 weeks earlier than any time in recent memory. Forcing stores to sell more quantities to meet the same sales figures.
  • Downward pressures of lower gross margins as a result of price cutting.
  • Heightened consumer expectations of further reductions for the post-Thanksgiving holiday weekend, that must be met.
  • Chronically high transportation costs (though they have contracted lately) to move goods around.
  • Slashed advertising budgets.
  • The unfortunate timing of 401k statements arriving at the end of October - beginning of November, bearing ill news regarding retirement portfolios.

The picture of a dour December, with high double-digit losses, becomes a bit more clear. And for those that make it, an unbelievably tough January.

Those companies with Human Resource Department that have been aggressive and forward-looking in their planning, will be ready for this development. Those without will be left with badly bloated employee rolls, confused and emotional managers at a time when all focus should be on driving business, and most unfortunately, a stress-filled environment full of guess-work and uncertainty about how to handle the situation properly.

Take action now, proactively. You owe it as a leader, to your employees, your management staff and your clientele, to be as professional and up-standing, most especially in tough times, as possible.

Toy Watch

Saturday, November 15

I can't believe I am saying this but.....

This watch is HOT!

I know it's from Toy Watch, the inexplicably-named, inexplicably-expensive watches that have laughed themselves all the way to the bank in recent years.

This one here, though, is different.

$385.00 buy it HERE, once they get back in stock.

Take (to) A Shower

I know we hate baby showers, men.

But if you absolutely, positively must go....
Why not be the star, your girl will love you for it.
Female peer envy is one of the strongest aphrodisiacs on the planet.

The way to achieve your goal is by bringing, not only the best gift, but the gift no one else even knew they craved.

That gift is an Hermes baby basket. Starring the hand-made, hand-stuffed, hand-sewn horsey you see above, named Hermy.

The horse is $890, but I consider that a small price to pay for being named Godfather of the child to a person you have never met.

Build you basket HERE

Results may vary.

A Woman Every Man Should Know

Mrs. John L. Strong

Ever wonder why your parties are called "parties" and not "affairs?"
Ever wonder why your best friends holiday cards sit on the center of the mantle at every household you know of.

Your friend, as should all men, takes stationary seriously. 

Mrs. John L. Strong will swing the balance back in your direction. 
Move over bacon, here comes Sizzlean!

Go HERE to learn more.

Bedat No. 8

Grow up and stop wearing what rappers tell you to like.

Bedat SCREAMS mature, sexy and heirloom all in one.

This piece is nice but a discerning few will cop the rose gold version.

See it HERE.

Shaken & Stirred

Quantum Of Solace is out this weekend. No duh, right?

Well I thought i might offer up that, when James Bond - a man that goes on  world wide killing sprees, has access to billions of dollars and will literally steal anything he can't buy- decides to dress for "work", he will be wearing clothes created by the only person more dangerous than he,

So, to repeat our lesson: Even the fictitious person who can have anything, craves this man's work!

Get on board now, the clock is ticking...

Zhao Jifeng

Thursday, November 13



Zhao Jifeng



Dhruvi is Groovy

Dhruvi Acharya is amazing. And not just because she shares  a name with one of the best behaved boys I have ever met, Dhruv Mamgain.

See more HERE.

Dhruvi is Groovy

Dhruvi Acharya is amazing. And not just because she shares  a name with one of the best behaved boys I have ever met, Dhruv Mamgain.

See more HERE.

Hiroshi Sugimoto

See More HERE.

Hiroshi Sugimoto

See More HERE.

Sam Messenger

See More HERE.

2009 ·clean needles by TNB