In this weekend's edition Barron's presents a list of companies (sub req) it expects to be the winners and losers of this year's holiday shopping season. Watchmaker Fossil (ticker: FOSL) is expected to be one of the winners. Here is a short extract from Barron's:
Watchmaker Fossil (FOSL) has succeeded in bridging the gap between affordable and luxury. The company, whose brands include Fossil , Relic, Giorgio Armani, Michael Kors and Donna Karan, sells not only to Wal-Mart (NYSE:WMT) but to high-end retailers such as Nordstrom (NYSE:JWN). And the company's gone global, which means that it's hardly dependent on holiday shoppers. "Fossil is in 90 countries, and is making inroads in China and India," says Dan Thelen, manager of the Loomis Sayles Small Cap Value Fund, which owns 470,000 of Fossil's 71 million shares.
Fossil , which changes hands around 20, probably would like to turn its own clock back about a year so, when its shares peaked at 32.37. But Thelen sees a return trip to those loftier precincts. "We're buying stuff that looks good for this Christmas, but also plain, good companies that got cheap," he says.
Comment: The following are extracts from Fossil management's Q3 2005 earnings results conference call:
We have begun to explore new opportunities for developing distribution into China and are currently developing plans to introduce some of our brands in this market in the coming year.
Our current brands already have a presence there, and Adidas is particularly strong in this market, so we believe we're in a good position to expand our business there over the next few years.
And we have hired some additional retail people that are based in Hong Kong and we have hired some people in Shanghai also and we're looking very closely at how we would go about that market, whether it would be a combination shop and shops and retail stores. But we would expect to add potentially some stores there next year and then accelerate it from there.
…..we think that Hong Kong is an opportunity and then shop-in-shops and possibly stores in China could be an opportunity for us.
And we had recently hired a person over there to accelerate the growth in retail and we're studying the markets right now and putting together a plan. But we do think that we could have a significant number of stores in Asia as well.
(Quotes are from the CCBN StreetEvents transcript.)
Final Comment: You can read about Fossil's licensing agreement with adidas-Salomon here.