Retail Roundup: J Crew, Nike, Luxury Retailers, Heinz

Excerpt from today's One Page Annotated Wall Street Journal Summary (which you can get emailed to you every morning by signing up here):

Downtown Goes Upscale

• Summary: Luxury retailers, attracted by high average incomes, new residential developments and relatively low rents, are moving into lower Manhattan, creating a luxury shopping alternative to Fifth Avenue. "Fifth Avenue rents have reached $1,400 a square foot, compared with $38 for space in the average American mall and $60 to $225 in Lower Manhattan.
• Comment on related stocks/ETFs: Not clear that there's much incremental impact on the retailers, such as Tiffany (TIF). A better play might be the REITs that own office and/or residential space downtown, such as Brookfield Properties (BPO).

Nike's Earnings Decline by 4.8%, Hurt by Charge

• Summary: Nike's (NKE) fiscal 4Q results included revenue up 7.6% year over year to $4.01 billion, driven by high end baseball sneakers, net income down 4.8% to $333 million. EPS of $1.27 was hit by a $0.12 litigation charge. Gross margin fell to 43.8% from 45.2% partly due to rising transport costs.
• Comment on related stocks/ETFs: More details in the full transcript of Nike's conference call.

AHEAD OF THE TAPE: Prep Schooled

• Summary: Catalog retailer J Crew starts trading today, after completing its IPO last night. CEO Millard Drexler is a retail genius who build the Gap but has expressed frustration with running a public company. He's advocated "controlled growth" for J Crew to avoid the misteps that hit the Gap.
• Comment on related stocks/ETFs: Excerpts from J Crew's (JCG) IPO filing here. Comprehensive coverage of IPOs here.

In Bid to Boost Flagship Brand, Heinz Courts a Golden Customer

• Summary: Heinz has been shedding brands on focusing on its core products. A key sales opportuntiy is selling ketchup to McDonald's, which uses mostly own-brand ketchup from Golden State Foods of Irvine, Calif. in quantities equivalent to 11% of Heinz' worldwide ketchup sales. (Heinz does supply Burger King and Wendy's.) McDonalds has replaced its own ketchup with Heinz in about 4,000 foreign restaurants, but not its 13,700 US restaurants, and there's no sign that it plans to switch to Heinz in the US. "Ketchup, condiments and sauces produce 41% of Heinz's sales and a greater share of profits."
• Comment on related stocks/ETFs: Incrementally positive for Heinz (HNZ) as McDonalds (MCD) US restaurants are only upside opportunity for the company.