RATING WAL-MART’S SHARES/2 THE ART OF COVER LINES/11 WWWDomen’s Wear Daily • The Retailers’FRIDAY Daily Newspaper • January 14, 2005 • $2.00 Beauty Feminine Touch NEW YORK — After a successful fall launch of Reaction for Him, Kenneth Cole is hoping for more of the same with its women’s counterpart, Reaction for Her. Launching in April, the scent will be available in about 1,800 U.S. department and specialty store doors and could do $25 million at retail during its first year on counter. For more, see page 7. Ullman’s Agenda for Penney’s: Inject Buzz and Maybe Beauty By David Moin generate more buzz about the the 1,000-unit chain during his first NEW YORK — Myron Ullman, J.C. brand, expand Penney’s off the mall meeting with investors, at a Penney’s new chairman and chief and maybe return to the beauty breakfast presentation Thursday at executive officer, has been on the job business in a major way. Citigroup Smith Barney, since he for only 44 days, but he knows Those were among the joined Penney’s. exactly what he needs to do: opportunities Ullman suggested for See Penney’s, Page 12 PHOTO BY GEORGE CHINSEE; STYLED BY BRYN KENNY GEORGE CHINSEE; STYLED BY PHOTO BY 2 WWD, FRIDAY, JANUARY 14, 2005 WWW.WWD.COM WWDFRIDAY Analysts Bullish on Wal-Mart Stock Beauty By Meredith Derby So analysts think the stock is due to see decent gains, especially since luxury stocks are projected GENERAL NEW YORK — Despite Wal-Mart Stores Inc.’s stag- to top out this year. Twelve-month target prices for J.C. Penney’s new chairman and ceo wants more buzz about the store and nant stock price over the last five years, invest- Wal-Mart shares range from around $65 to $70. 1 its brands, higher productivity, Internet pizzazz and maybe a beauty revival. ment analysts say now is the time to snap up its “Over the next year, [Wal-Mart shares have] a Despite Wal-Mart’s stagnant stock price the last five years, analysts say its shares as several positive catalysts stand to push very good chance of outperforming the S&P 500,” 2 the right time to snap up its shares thanks to several positive catalysts. the stock upward. predicted Chris Graja, securities analyst at Argus After enjoying a solid run-up from 1997 to 1999 Research, who has a “buy” investment rating on Wal-Mart used its formidable skills at execution Thursday to launch a — hitting an all-time closing high of $69.44 on Dec. the stock. 2 major, coordinated public relations effort aimed at refuting its opponents. 27, 1999 — the stock’s 200-day moving average has Paul Nolte, director of investments at Hinsdale SUZY: Double trouble in the Aston house…A weekend getaway to “Dye remained “range bound,” hovering between $50 to Associates, said Wal-Mart’s stock “is the cheapest 4 Fore”…Kate Moss sets a birthday bash for herself at her English estate. $60 during the past five years. it’s been now since 1998,” currently trading at about The shares closed 2004 essentially flat, and at 19.7 times expected fiscal 2004 earnings of $2.40 a BEAUTY: After scoring a hit this fall with his men’s version, Kenneth Cole around $53, the stock is currently down about 3 share, according to Thomson First Call. That’s down 7 hopes to see a similar reaction for his newest women’s scent this spring. percent relative to the S&P 500. significantly from the roughly 50 times earnings the Vera Wang is taking another trip to the retail altar this spring with Sheer Veil, It’s not surprising 2004 was a flat year for Wal- stock saw in the late-Nineties bubble era. 7 a limited-edition fragrance that will roll out in April in just 320 doors. Mart’s stock: the retail environment was not overly Apparel is one key area that analysts expect favorable for the deep discounters. For Wal-Mart, will help fuel profit growth. Moody’s Investors Achille Maramotti, founder of Max Mara Fashion Group SpA, died double-digit, year-over-year increases in gas prices Service estimates annual apparel revenues to be 15 Wednesday in the family’s castle near Reggio Emilia. He was 78. crimped spending on the firm’s core, low-income $33 billion at Wal-Mart. That would make up 8.7 In observance of Martin Luther King Jr. Day, WWD will not publish on Monday. consumer. Those shoppers also may have been percent of analysts’ total revenue expectation of drawn toward dollar stores, or to Target Corp.’s in- $287.5 billion in fiscal 2004. Classified Advertisements ..................................................................14-15 creasingly competitive prices, analysts have said. Deborah Weinswig, managing director of U.S. eq- To e-mail reporters and editors at WWD, the address is In addition, community protests against the uity research at Citigroup Smith Barney, said Wal- [email protected], using the individual’s name. opening of new supercenters as well as sexual dis- Mart gradually improved the quality of its grocery WOMEN’S WEAR DAILY IS A REGISTERED TRADEMARK OF FAIRCHILD PUBLICATIONS, INC. COPYRIGHT ©2005 crimination and labor-related lawsuits continue products, thus attracting higher-income shoppers. FAIRCHILD PUBLICATIONS, INC. ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. VOLUME 189, NO. 10. WWD (ISSN # 0149-5380) is published daily except Saturdays, Sundays and holidays, with one to affect the retailer’s reputation. As a result, Weinswig, who also rates Wal-Mart stock additional issue in June; two additional issues in April, May, August, October, November and December, and three additional But analysts speculate that the renewed focus on a “buy,” said, “They can do the same with apparel.” issues in February, March and September, by Fairchild Publications, Inc., a subsidiary of Advance Publications, Inc. PRINCIPAL apparel by Wal-Mart as well as international expan- International expansion in China is another OFFICE: 7 West 34th Street, New York, NY 10001. Shared Services provided by Advance Magazine Publishers Inc.: S.I. Newhouse, Jr., Chairman; Steven T. Florio, Vice Chairman; Charles H. Townsend, C.O.O.; John W. Bellando, Executive Vice-President and C.F.O.; Jill sion opportunities could trigger profit growth in way Wal-Mart can boost profits and please in- Bright, Executive Vice-President_Human Resources; John Buese, Executive Vice-President_ Chief Information Officer; David Orlin, 2005, which could energize the retailer’s stock price. vestors. Wal-Mart International plans to open 155 Senior Vice-President_Strategic Sourcing; Robert Bennis, Senior Vice-President_Real Estate; David B. Chemidlin, Senior Vice- Wal-Mart did not return calls seeking comment. to 165 units in existing markets in fiscal 2005. President_General Manager, Advance Magazine Group Shared Services Center. Periodicals postage paid at New York, NY and at additional mailing offices. Canada Post Publications Mail Agreement No. 40032712. Canadian Goods and Services Tax Registration Ulysses Yannas, an analyst at Buckman Of course with the stock market, nothing is a No. 88654-9096-RM0001. Canada post return undeliverable Canadian addresses to: 4960-2 Walker Road, Windsor, ON N9A 6J3. Buckman & Reid, said the retailer has “reempha- given and bulls can often turn bearish on a sector, or POSTMASTER: SEND ADDRESS CHANGES TO WOMEN’S WEAR DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008. FOR SUBSCRIPTIONS, ADDRESS CHANGES, ADJUSTMENTS, OR BACK ISSUE INQUIRIES: Please write to WOMEN’S WEAR sized profits, and we can see that in the way they even on a particular stock. Hinsdale Associates’ DAILY, P.O. Box 15008, North Hollywood, CA 91615-5008; Call 800-289-0273; or visit www.subnow.com/wd . Four weeks is went through the process of Thanksgiving [by not Nolte recommends playing Wal-Mart’s stock as “a required for change of address. Please give both new and old address as printed on most recent label. First copy of new initially cutting prices].” pure hedge.” subscription will be mailed within four weeks after receipt of order. 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