• The first non-footwear Crocs-branded products included a line of adult and children’s socks from Sock and Accessories Brands, which launched in the holiday 2011 season.  These will also be available in Europe.
• Crocs has also signed up with Accessory Exchange for it to produce Crocs-branded accessories for men, women and children. These will include hats, bags, backpacks, socks and gloves for Crocs retail stores and the Crocs.com website.
• In April 2012, the Crocs brand will extend to children’s apparel through an agreement with the A Group in 46 countries. Crocs-branded sunglasses and sunglass accessories also will launch in May 2012 in a deal with Eye King, LLC to produce sunglasses for adults and youth for retail and wholesale distribution in the U.S. and Canada.
• Crocs Professional Footwear Division is in a partnership with ICER Brands to “build on the loyal following of medical professionals with the introduction of Crocs-branded scrubs. This new medical gear is available now through specialty stores and online.” 
• Paramount, a sports licensee, recently kicked off Collegiate and MLB licensed footwear for the brand.

OK. so let’s get this straight.  Medical scrubs, baseball shoes, eyeglasses, hats backpacks, and gloves… All with the Crocs label on them.

This just sounds bad on the surface.  As far as investors are concerned, if it grows the brand and captures new sales that were previously uncharted then it is a win.

200 million pairs of shoes sold is probably a better judge than us calling Crox one of the ugliest brands that there is.  After all, opinions greatly differ and the sales results probably speak louder than critical words.

JON C. OGG

The company is aiming to bring a site for serious collectors and sports fans and offer a broad selection from official licensees of the National Football League, Major League Baseball, National Basketball Association, National Hockey League, and the International Federation of Association Football.

Collectors can now browse collectible items by item type, sport, year, team and price.  The offerings will be from trading cards and ticket stubs to game-used jerseys and autographed sports gear.

For many of these products, the store will display the authentication source and condition rating from authentication service providers like Professional Sports Authenticator (PSA) of Collectors Universe, Inc. (NASDAQ: CLCT), and other such as James Spence Authentication (JSA) and Beckett Grading Services (BGS).

You will not find that T206 Honus Wagner baseball card for sale that we just discussed.  That is for sale for $775,000 and a higher-grade sample just sold for north of $1.5 million.  More detail on investing in the T206 Honus Wagner is here.

As far as how Amazon will assure authenticity, it noted “The emphasis on authenticated selection, combined with our A-to-z Guarantee protection on purchases, allows customers to shop the new store with confidence.”

Buyers should know that this may distort prices paid in many cases.  If a wife or girlfriend wants to buy an item for an intimate other or if a father or mother want to buy collectibles for their kids, they may not have a firm grasp on the prevailing market price ranges that should be paid.

This will not derail the eBay auction dominance nor will it kill the auction houses which auction off the really high-end items.  What it may skew is all of the items out on the market in the under-$50 to $300 priced items.  The baseball memorabilia store’s top 7 items by price are all Babe Ruth signed baseballs and the rank is from over $46,000 down to $10,950.  Thanks, but no thanks. 

Lastly, keep in mind that Amazon has been selling many collectibles items.  This launch is more of a focused effort and it means that Amazon wants to attract many more sellers. The new launch is here.

JON C. OGG

The guidance on January 5 was victim of soft sales in the first two months of the quarter generating slightly negative same-store sales for its fourth quarter with non-GAAP earnings coming in a range of $0.65 to $0.70 earnings per share.

Our thesis was simple” For new investors, this is not a fourth quarter story.  This is not a story of guidance for the current quarter, and it may not even be a story of strong results in 2012… Ron Johnson is set to transform the look and feel of this company entirely.”

Penney’s shares at the time of our call were down over 6% on that day at $32.75.  The problem now, if there is a problem, is that the new concept unveiling and the leaner retail worker structure has met a guidance presentation all in one week.

A gain of 15% to $39.48 on Thursday now has shares up 20%.  Why is this a problem?  The consensus analyst target is down under $34.00 and the 52-week trading range is $23.44 to $41.00.  It was known that Ron Johnson was going to use his Apple magic to transform the company.  It was known that he was going to have the presentations.

A 20% gain in three weeks is generally a gift no matter how you cut it.  Even if analysts raise their price target objectives substantially, at a minimum we would only look to enter on a pullback now.  Taking at least some profit at this point would not hurt anyone even if it is only on part of the position.

JON C. OGG

Teen stores Buckle and Zumiez battered expectations, while Gap and Wet Seal both missed expectations badly.

Data from CNBC.

Shares had risen from under $26 to over $35 based upon Ron Johnson’s taking the helm.  Prior to that, J.C. Penney had been somewhat on life support compared to Macy’s Inc. (NYSE: M) and Saks Inc. (NYSE: SKS).  It did manage to do better than Kohl’s Corporation (NYSE: KSS).

The retail chain posted December same-store sales of 0.3% versus an expected drop of -0.1%.  Last year the company posted a same-store sales increase of 3.7%.  The outlook is as follows: “Due to the softer sales performance during the first two months of the quarter, the Company now anticipates that comparable store sales for the fourth quarter will be down slightly to last year. Earnings before one-time items identified below, are now expected to be in the range of $0.65 to $0.70 per share on a non-GAAP basis, reflecting lower sales and higher markdown activity than anticipated throughout the quarter.”  The consensus estimate had been $1.08 EPS.

Investors who missed getting in on this one may look at the news with a smile because it at least allows them a closer chance of getting in on a transformation in the making. Ron Johnson, the brains behind the retail effort of the hugely successful stores of Apple Inc. (NASDAQ: AAPL), has taken over as CEO.  For new investors, this is not a fourth quarter story.  This is not a story of guidance for the current quarter, and it may not even be a story of strong results in 2012. 

Ron Johnson is set to transform the look and feel of this company entirely.  The company has already signed a deal with Martha Stewart Living Omnimedia Inc. (NYSE: MSO) for branded merchandise for years ahead.  Johnson is going to unveil his new store design later this month (January 25) and here is a photo of the invite that was sent to me last night:

Penney’s shares are down about 6.2% at $32.75 and the 52-week range is $23.44 to $41.00.  This drop still only gets the stock back down to the prior consensus price target of $32.31 from Thomson Reuters.  Unfortunately, this turnaround story is not cheap against other retailers on a forward earnings valuation.  That happens to be the case in many turnarounds as investors sometimes pay a premium to get in line.

New investors and those on the sidelines may hope that the stock gets back into the high $20′s.  That may happen and it may not.  When you consider that Ron Johnson is likely going to revamp the company from the ground up and give a major facelift to bring the Apple-cool through the doors and when you consider that Apple’s playbook has been to “underpromise and over-deliver,” this drop may be a blessing for new and interested investors.

The good news is that the stock also offers stock options so investors van hedge their turnaround bets rather easily.  Options expire on January 20, 2012, but the February options make it easy to invest with providing downside protection of about only 5% risk in the next six weeks.  For a turnaround story under a great new retail leader, that might be a gift.

The other side of the coin is simple, even if hard to consider: What if Ron Johnson flops?  It is easy to argue that clothing, accessories and household products have no catalyst like Apple did a decade ago.

Stay tuned.

JON C. OGG

Fortunately for investors in retail stocks, Target and Wal-Mart are not Sears. We just featured this one as one of the worst big stock stories of 2011, but we did not call for a bankruptcy nor did we include it on our list of stocks unlikely to survive 2012.  The most recent effort to spin off Orchard Supply Hardware Stores (NASDAQ: OSH) is interesting on the surface but it is just too small to make a difference at this point.

Unfortunately, a report on the CNN Money site did note that there are rumors of a Sears bankruptcy.  That is their story rather than ours.  Still, analysts have pounded upon Sears and some see much more downside on top of the pain and suffering we have seen in recent weeks (and years).

• In early December came word that Imperial Capital issued a “underperform (SELL) rating and said that it could go down to $6.00 in the new two to three years.
• Barclays recently cited that Sears appliance market share could fall to 31% from 39% and offer a large reward for other appliance sellers.
• On December 30, Zacks put Sears on its #5 list, a list of stocks with a “Strong Sell” rating.
• On December 28 came word that Credit Suisse was maintaining and Underperform rating… with a $20 price target objective.
• Fitch also lowered its corporate credit rating in the last week of December.
• Barron’s called for the start of 2012 that Sears could lose another 80% of its value.

Sears is up 0.1% on Tuesday at $31.46 verus a new 52-week range of $31.17 to $94.97 and its market cap is now down to about $3.35 billion.  The most recent short interest was listed as 10.88 million shares as of mid-December before the latest warning.

The saga continues. The question is whether or not this turnaround can ever come to fruition. Please feel free to take the absolute yes/no anonymous poll below.

JON C. OGG

For Under Armour, the pick is Visible outlet square footage growth, as well as new line extensions, and even its move away from sweat repellent form-fitting materials into the cotton-based market.  The firm expects over 25% top-line growth as a result.

For Foot Locker, the firm does not expect a deceleration in the athletic footwear cycle that has been driving solid comp growth in running and basketball.  The firm is also looking at the company’s opportunity to improve its margin structure through changes to its apparel business that are less top-line dependent.

Both companies have some overlaps in the customer bases.  Canaccord Genuity sees several trends to watch during 2012: 

• The firm expects broader price increases during 2012 as many companies are planning to pass on higher costs with some seeing no pushback and others being forced to mark down price.
• The athletic cycle is expected to continue in 2012 with footwear trends in running and in basketball.  The new lightweight shoes for running, based on past new product cycles, could persist for three to five years and the current cycle is robust.  This is also believed to be a secular trend towards a more active and athletic lifestyle.
• Tier 1 brands should dominate with brands having better pricing power than Tier-2 and Tier-3 retail stories.

What is interesting is that the report starts out, “Heading into 2012, we are not assuming a significant improvement to the consumer spending environment, which will likely continue to be pressured by high unemployment and low wage growth. In addition, price increases from both apparel and footwear manufacturers will begin to flow through…”

As far as the targets…. The most recent Under Armour price target is $102.00 versus a Thomson Reuters consensus price target objective of $82.00 and versus a $73.00 price target today. Canaccord Genuity is the ‘Street High’ price target objective in Under Armour.  The most recent Foot Locker price target is $30.00 versus a Thomson Reuters consensus price target objective of $27.00 and versus a $23.67 price target today.  The ‘Street High’ price target is $34.00.

JON C. OGG

MSLO has had prior product distribution deals with Macy’s, Inc. (NYSE: M) and also with K-Mart under Sears Holdings Corporation (NASDAQ: SHLD).  The Macy’s deal still has many key Martha Stewart products but Martha Stewart products have lost that Kmart deal and Martha Stewart has moved a home furniture, bath, paint,, kitchen and other efforts to The Home Depot Inc. (NYSE: HD).

Ron Johnson, the guru who was credited with launching the Apple Inc. (NASDAQ: AAPL) retail look, theme, and strategy, has now taken over as head of J.C. Penney and this is his first real public change of substance.  Customers will get to start entering Martha Stewart stores starting in February 2013. 

This is a 10-year commercial agreement where both companies will jointly develop an e-commerce site as well.  MSLO is expected to receive more than $200 million from J. C. Penney over the initial 10-year contract period.  Another feature of the pact is that J. C. Penney spent some $38.5 million for 11 million newly issued shares of Martha Stewart Living Omnimedia (at $3.50 a share) and it will now hold a 16.6% stake in MSLO and will have a seat on the board of directors.

J.C. Penney shares are down about 4 cents at $33.26 versus a 52-week trading range of $23.44 to $41.00.  The real win is in Martha Stewart Omnimedia shares, where they are trading up 28% at $4.06 versus a 52-week range of $2.77 to $5.49.

JON C. OGG

The offering calls for a price per share between $17.00 and $19.00 for some 41,700,000 Ordinary Shares.  The company has also been authorized to list the ordinary shares on the New York Stock Exchange under the “KORS” stock ticker.

The syndicate is large and includes Morgan Stanley, J.P. Morgan, Goldman Sachs, Baird, Jefferies, Nomura, and Piper Jaffray.  These underwriters will also have a 30-day option to purchase up to an additional 6,255,000 ordinary shares from the selling shareholders.

Michael Kors calls itself “a rapidly growing global luxury lifestyle brand led by a world-class management team and a renowned, award-winning designer. Since launching his namesake brand 30 years ago, Michael Kors has featured distinctive designs, materials and craftsmanship with a jet-set aesthetic that combines stylish elegance and a sporty attitude.”

Total revenue was $803.3 million in Fiscal 2011, up from $508.1 million in Fiscal 2010.  In the same periods, net income was $72.5 million in Fiscal 2011 versus $39.2 million in Fiscal 2010.  Sales growth north of 50% and more than 80% income growth.  For the 6-months ended on October 1, the sales were $520.2 million in 2011 versus $322.4 million and net income in the same period grew to $50.5 million from $21.4 million.

The Full F-1 Filing with more detail is available here.

JON C. OGG

Today we have three different firms which are chomping at the bit to get into Lululemon.  Apparently the valuation has just become too enticing.  We show a consensus price target of $55.40 from Thomson Reuters, but that may not quite be adjusted for all of the new analyst price targets.

Barclays raised its rating to OVERWEIGHT from EQUALWEIGHT and it assigned a $58.00 price target objective. Janney Capital Markets has raised the rating to BUY from NEUTRAL and it assigned a fair value target of $57.00 per share. KeyBanc Capital Markets also raised its rating to BUY from UNDERWEIGHT and assigned a price target objective of $58.00 per share.

Lululemon shares are trading up nearly 3% at $48.52 in pre-market trading versus a 52-week range of $25.82 to $64.49.  Shares actually went under $44.00 yesterday on the disappointing revenues but they managed to close up at $47.17 as buyers came into the stock.

JON C. OGG