17 March 2016
Americas/United States
Equity Research
Specialty Softlines
Softlines and Retail
Research Analysts
Christian Buss
212 325 9667
[email protected]
Michael Exstein
212 325 4147
[email protected]
David Hartley, CFA
416 352 4580
[email protected]
Sara Shuler
212 325 7643
[email protected]
Pallavi Bakshi
212 538 8434
[email protected]
INDUSTRY PRIMER
Revolution in the Softlines Brand Landscape:
Digital Is the New Wholesale
We believe the sophistication of digital platforms and technology has led to a
new brand building paradigm and a structural shift in how brand equity will be
derived in the global softlines industry. We now see digital commerce and
marketing as the primary and most effective mechanisms for building softlines
brands, replacing the historical gatekeepers of third-party retailers and mass
media marketing. This structural change has reduced the barriers to entry for
new brands, created opportunities for brands to build profitable enterprises
much earlier in their lifecycle, and created competition where scale and retailer
relationships have historically provided high barriers to entry. Adding to this
erosion of support for the traditional brand-building model, the rise of onlineonly marketplaces like Amazon, backcountry.com, wish.com, YOOX, and
ASOS, as well as subscription-based models like Birchbox and Trunk Club
creates a new distribution channel for brands whose primary relationship with
its customers is digital. This report evaluates the consequences of this radical
shift across the softlines landscape, and highlights our preference for:

Best-in-class digital apparel marketplaces like Amazon and Zalando.

Companies capable of converting messaging and sales channels into
the consumer-first digital realm, particularly Nike, lululemon, Under
Armour, and possibly Coach, Columbia, Michael Kors, Ralph Lauren,
Tiffany, VF Corp. Brands.

Online-only upstarts lacking legacy distribution and marketing models
like Bonobos, Warby Parker, Everlane, Harry's, Dollar Shave Club.

Companies with the capital and predisposition to diversify through
acquisitions like Coach, Urban Outfitters, Under Armour, Nordstrom,
Hudson's Bay Company.
We are increasingly cautious on traditional specialty retailers with outsized
store footprints (LB, GPS) and those with heavy reliance on third-party brands
that are likely to go direct over time (DSW, FL, FINL, ZUMZ). We downgrade
shares of LB to Neutral as a result and reiterate our cautious stance on DSW,
FL, FINL, GPS, and ZUMZ.
■ eCommerce Will Continue To Deliver Outsized Growth As Distribution
Mix-Shift Moves Towards A Sustainable Balance. While physical stores
are struggling with traffic declines, eCommerce growth rates continue to
accelerate. eCommerce has generated over 50% of total apparel industry
growth over the last four quarters. We expect this trend to persist and see
DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST
CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business
with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest
that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment
decision.
CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS
BEYOND INFORMATION®
Client-Driven Solutions, Insights, and Access
17 March 2016
opportunity for eCommerce to reach 35-40% of total softlines industry sales over time, a
threshold approached by fast-movers in the space where consumer preferences have
shifted quickly (teen apparel for instance).
■ Acquiring Digital Expertise Might Be More Valuable Than Building It. As traditional
retail companies work to understand and capitalize on eCommerce growth, acquisition
activity may increase as online brands and companies are purchased in order to gain
core digital competency more effectively. Companies that have grown up online seem
to have a deeper understanding of the customer base within that unique channel which
could unlock value for a traditional company. Likewise, M&A could also provide a
vehicle for online start-ups to expand into the physical world with a partner who
understands real estate and store distribution. We see early signs of this in
Nordstrom's acquisitions of Haute Look and Trunk Club, and Hudson's Bay Company's
acquisition of Gilt Groupe.
■ Broadlines View. The mall anchors with the largest footprints are no longer the
gatekeepers for growth for emerging brands, but mall anchors remain an important
distribution channel. Although department store focused distribution may no longer be
one of the first steps in building brand equity, this retail format still plays an important
part in broadening distribution. As emerging brands mature, select department store
doors can serve as a physical distribution channel, in lieu of owned retail stores or to
supplement owned retail stores to reach new markets. This shift in the mall anchors'
role in developing emerging brands suggests that the best positioned mall anchors are
no longer the ones with the largest quantity of doors but rather possessing the highest
quality, which will allow brands to selectively expand while sustaining or even
expanding brand equity.
■ A Note On Hudson's Bay. Ecommerce is an important component of the organic
growth story of HBC.TO—a story that may be both undermined (higher retail rents) and
overshadowed by the real estate monetization story. eCommerce sales tend to replace
brick-and-mortar sales at the DSG banners and at Saks, but perhaps at a lower
margin. However, the acquisition of Gilt Groupe and its subsequent integration with the
Saks Off Fifth banner’s brick-and-mortar business may actually provide an opportunity
for complementary growth in eCommerce and brick-and-mortar sales at these banners.
Softlines and Retail
2
17 March 2016
Online Brand Building – The New Paradigm
Online Brand Building Is Likely A Better Mousetrap. Innate advantages include: 1)
Initial lower cost of capital; 2) Higher IMU's; 3) Controlled merchandising and messaging;
4) Direct, often instant, consumer feedback; 5) Benefits from the trend of consumers
shifting spend to eCommerce from brick-and-mortar; 6) More personalized and
customizable products and services; 7) When establishing distribution, seamless inventory
is already factored into the equation; and 8) Internet marketing, the new model's primary
source of spend, allows for rapid purchasing and feedback loop, versus traditional media
in the old model.
Figure 1: Traditional Model – Wholesale Brand Building
BRAND POWER
Traditional Model
Expansion - Online
Cost $
Brand Awareness
Owned Retail - Build Out
Cost $$$$
Incubate - In stores
Cost $$$
Market - Mass Media (Magazines,
Newspapers, Billboards, TV)
Cost $$
Wholesale Stores
Cost $$
Or Retail Store
Cost $$$$
Brand Concept
Cost $$
Time
BRAND POWER
New Model
Incubate - Online
Cost $$
Market - Social Media (Instagram,
Blogs, Facebook)
Cost $
Owned eCommerce
Cost $
Expansion - Wholesale
Cost $$
Brand Awareness
Owned Retail - Build Out
Cost $$$$
Brand Concept
Cost $$
Time
Source: Credit Suisse Equity Research
Softlines and Retail
3
17 March 2016
eCommerce Sales Growth at a Watershed
Our analysis of eCommerce and brick-and-mortar growth suggests that we reached a
watershed moment, with eCommerce generating more than 50% of sales and profit growth
for the overall apparel industry. Analysis of U.S. Census Bureau data on eCommerce
sales and extrapolation of recent growth trends across the softlines industry suggests that
over the next 15 years, the overall softlines industry in the United States:
■ Could grow to $390B in revenue from $340B
■ Can sustain a 1.4% CAGR from 2015-2030.
However, growth will not be distributed evenly. We believe that eCommerce:
■ Has potential to approach 37.5% of total softlines industry sales
■ Could generate $94B in incremental revenue
■ Can sustain a multi-year CAGR of 7%.
Brick and mortar stores, on the other hand:
■ Could fall to 62.5% of total industry sales
■ Could give up $19B in total sales volume
■ Grow at a multi-year GAGR of -0.5%.
We believe brands that start online will be a primary beneficiary of this structural spending
shift. We also see opportunity for online brand aggregators as well as traditional brands
capable of converting their messaging and sales channels away from mass marketing into
the new consumer-first digital realm.
Figure 2: Softlines Sales Growth And eCommerce Penetration
2015-2030 Softlines Industry Sales CAGR
7.1%
1.4%
US Softlines Sales
-0.5%
US Brick and Mortar
US eCommerce
Source: Credit Suisse estimates, U.S. Census Bureau
Softlines and Retail
4
17 March 2016
Figure 3: Softlines eCommerce Penetration
Softlines eCommerce Penetration
37.5%
40.0%
32.6%
35.0%
30.0%
25.3%
25.0%
20.0%
16.7%
15.0%
8.4%
10.0%
5.0%
3.3%
0.8%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
0.0%
Source: Credit Suisse estimates, U.S. Census Bureau
Figure 4: eCommerce, Brick-And-Mortar Sales Breakout
Softlines Sales Growth Y/Y
350,000
140,000
300,000
120,000
250,000
100,000
200,000
80,000
150,000
60,000
40,000
100,000
20,000
50,000
eCommerce Softlines sales
2029E
2027E
2025E
2023E
2021E
2019E
2015
2017E
2013
2011
2009
2007
2005
2003
2001
0
1999
0
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
2010
2011
2012
2013
2014
2015
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
160,000
Brick and Mortar Retail Sales
eCommerce Softlines Sales
Softlines Industry Sales
Brick and Mortar Retail Sales
Brick and Mortar Retail Sales
eCommerce Softlines sales
Source: Credit Suisse estimates, U.S. Census Bureau
Figure 5: Total Softlines Sales, Growth Rate
Total Softlines Sales
410,000
390,000
370,000
350,000
330,000
310,000
290,000
270,000
250,000
Total Softlines Sales Growth Y/Y
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Softlines Sales dollars
2030E
2029E
2028E
2027E
2026E
2025E
2024E
2022E
2023E
2021E
2020E
2019E
2018E
2017E
2015
2016E
2014
2013
2012
2011
2010
0.0%
Softlines Sales
Source: Credit Suisse estimates, U.S. Census Bureau
Softlines and Retail
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17 March 2016
Resolving The Online Profit Problem
One area of deep concern with respect to this rise of online sales is the current profit
challenges faced by the eCommerce business model in the softlines industry. A combination
of low average unit retail prices, high shipping costs, high competition, and underutilized,
immature infrastructure across the softlines industry has led to eCommerce softline industry
operating margins well below those of traditional brick-and-mortar retailers. We estimate total
profit margins for eCommerce are currently 250-300bp below those of traditional stores, or
7%, versus traditional store margins of 10%. As mix shifts online, there are likely the following
two pressures on total industry operating margin:
■ Declining productivity of brick-and-mortar stores pressuring store margins
■ Aggregate mix shifts to lower-margin eCommerce channel
As a result, we view it as likely that overall softlines industry margins deteriorate over the next
several years, with our long-term model suggesting that total industry operating margins may
decline from a peak of 10% in 2000 to a trough of 8.8% in 2020. When combined with overall
industry growth of 1-2%, this suggests a multi-year period of very low growth in operating
profits for the U.S. softlines industry. From 2015-2020, we estimate a total profit CAGR of
0.2%.
Figure 6: Softlines Sales Growth And eCommerce Penetration
Softlines Operating Margin
10.50%
10.00%
9.50%
9.00%
8.50%
2029E
2027E
2025E
2023E
2021E
2019E
2017E
2015
2013
2011
2009
2007
2005
2003
2001
1999
8.00%
Softlines Operating Margin
Source: Credit Suisse estimates, U.S. Census Bureau
Profit challenges are highly likely to be heavily weighted to brick-and mortar locations,
where deleverage of rent and infrastructure is likely to be a significant problem in the nearto mid-term. Our long-term estimate is for:
■ Total brick-and-mortar profit declines averaging 1.5% Y/Y over the next 15 years,
■ eCommerce profit growth CAGR of 10.8%,
■ eCommerce to represent 46% of total industry profits by 2030.
Softlines and Retail
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17 March 2016
Figure 7: Softlines Industry Profit CAGR
2015-2030 Softlines Industry Profit CAGR
10.8%
1.6%
-1.5%
US Softlines - Operating
Profit
US Brick and Mortar Operating Profit
US eCommerce - Operating
Profit
Source: Credit Suisse estimates, U.S. Census Bureau
However, we do expect store margin declines to moderate following a period of store
rationalization and mall closures, alleviating some of this pressure. More importantly, we
expect shipping cost challenges to moderate as expanded industry distribution
infrastructure reduces cost and time to ship, while infrastructure investment in systems,
facilities, and IT are likely to leverage as the sector gains scale. As a result, we anticipate
continued improvement in eCommerce retail profit margins, with online profit margins
eclipsing store margins beginning in 2023. As a result, we expect the overall drag on
profits from eCommerce to reverse, with the online segment subsidizing profits from 2023
to 2030.
Figure 8: Softlines Sales Growth And eCommerce Penetration
Softlines Operating Margin
eCommerce Operating Margin
2030E
2029E
2028E
2027E
2026E
2025E
2024E
2023E
2022E
2021E
2020E
2019E
2018E
2017E
2015
2016E
2014
2013
2012
2011
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Brick and Mortar Operating Margin
eCommerce Margin Impact On Industry Profit
2010
2011
2012
2013
2014
2015
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
160bps
140bps
120bps
100bps
80bps
60bps
40bps
20bps
0bps
-20bps
-40bps
-60bps
Source: Credit Suisse estimates, U.S. Census Bureau
Softlines and Retail
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17 March 2016
Store Count
Figure 9: Coverage Universe – Store Count
Owned Store Count
3432
3273
3005
1520 1500
974
932
931
658
642
623
576
480
465
434
419
354
305
252
191
177
145
100
Source: Company data
eCommerce Penetration
Figure 10: Specialty Softlines - eCommerce As A % Of Sales
eCommerce Penetration
28.9%
22.5% 22.0%
16.0%
16.0% 15.8%
15.2%
14.0% 13.5%
13.0% 12.8%
12.1%
10.4%
9.4%
8.8%
7.9%
6.0%
4.9%
4.1%
3.8%
3.6%
1.1%
URBN VRA
ANF
AEO EXPR
LB
GPS
OXM ZUMZ TUMI DECK
FL
ARO ASNA CROX BKE
TIF
SIG
NKE FRAN VFC
SKX
Source: Company data, Credit Suisse estimates
Softlines and Retail
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17 March 2016
Advantages Of Online Brand Building
The new model of fostering a brand Online, versus 3rd party distribution, offers many
natural advantages, which we believe unlocks a unique value proposition.
Cost Of Capital
We believe Online brand building benefits from a low initial cost of capital structure. If we
look at the first four steps in brand building, before mass expansion comes into play, we
estimate that starting a brand Online is 1.5x less expensive than 3 rd party distribution and
6x less expensive than starting from a physical retail store concept.
Brand Concept – We believe this stage, which includes brand definition, aesthetic, logos,
and creation of show samples, is relatively the same cost, no matter what channel a brand
originates.
Inception – This includes the launch of the brand. We estimate Online start-ups can
spend as little as a few thousand dollars to launch a hosted website. Brands that start with
3rd party distribution must work out terms with their partner covering logistics to
markdowns and potential returns. There may also be requirements from the 3 rd party
distributor for products to be sold in their stores, which could add additional costs. Brands
that start from an owned retail store are likely to have the highest costs given lease
commitments, renovations, and staffing expenses.
Marketing – Online start-ups tend to dedicate most of marketing spend online and on
social media platforms. This requires little to no cost to initiate and reach a broad
consumer base. Brands that start in stores tend to follow the more traditional media
channels. They create formal ad campaigns and circulate in newspapers, magazines,
billboards, and television, which is a more costly approach.
Incubation – At this stage brands have had some success and work to capitalize on it.
Online brands may spend more money to enhance their website platform or may turn to an
eCommerce department store to further foster the brand online. When going through
physical 3rd party distribution, this stage may require extra costs to update presentation in
stores with new fixtures or shop-in-shops.
Figure 11: Initial Cost Of Capital Analysis
Initial Cost of Capital
6x higher
1.5x higher
Lowest Cost
New Model - Online
Old Model - Wholesale
Old Model - Retail
Source: Credit Suisse estimates
Softlines and Retail
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17 March 2016
Higher IMUs
Fostering brands Online also allows for higher IMU's as revenue and profits are fully
captured versus selling to 3rd Party distributors. We estimate that in general, brands
receive about 56% mark-up when selling to 3rd party partners compared to an 80% IMU
when selling directly. If the at-retail value of goods is $100k, for example, that equates to
an $80k profit for the brand versus a $25k profit through wholesale partners.
We believe this more profitable avenue combined with a lower cost of capital model can
help new brands online generate cash and reach a break-even point at a faster rate.
Figure 12: Average IMU Comparison
IMU Comparison
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
80%
56%
1
3rd Party Model - Brand IMU
Owned Online - Brand IMU
Source: Credit Suisse estimates
More Flexible Pricing Options
Some online start-ups are using this IMU gap to help compete on price and quality for
consumers. Online brands such as Everlane, Maison Standards, and Cuyana have
provided a value proposition for consumers by providing quality styles at lower prices than
if they were sold in stores.
Softlines and Retail
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17 March 2016
Marketing
Brands that develop online tend to favor digital media for marketing as opposed to
traditional media. Traditional media requires brands to create costly ad campaigns, with
sets and styling, for the looks they wish to feature. Just before goods hit store floors,
campaigns are circulated in newspapers, fashion magazines, television etc. This is
intended to drive customers to the store to buy the latest product. From campaign
inception to sale of product can take months.
Online start-up brands tend to focus marketing spend where they are already familiar, the
internet. This can be done at little or no up-front cost in initial stages via twitter, Facebook,
and Instagram. This may also include webpage banner advertising, search engine
optimization, and product placement via influencers. Imagery can be refreshed daily, a
consumer can click on the link, purchase, and comment within a day. If we add in
shipment time, the entire process can be completed in as little as a week.
We believe that word-of-mouth remains the most powerful form of advertising. The beauty
of social media is that it personalizes and amplifies word-of-mouth endorsements, which
we believe can help accelerate brand growth when positive. Consequently, negative
feedback can cause rapid deterioration of brand equity.
Figure 13: Marketing Cycle – Traditional Media
Old Model
Ad Campaign Created
Store Visits/Sales
Media Buzz
Can take months from campaign to sale to media buzz…..
New Model
Digital/Social Media Marketing
Website Traffic/Sales
Media Buzz
Can be acheived within
a week
Source: Credit Suisse research, Credit Suisse estimates
Softlines and Retail
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17 March 2016
Enhanced Editorial Content
Online brands have also enhanced the marketing editorial content game. Brands can
create content online themselves that is able to be searched and saved, which can likely
reach a more broad distribution network than typical fashion magazines in the past. We
believe these efforts are also more personal and intimate than via the traditional model
and consumers can react, click, and likely generate sales at a more rapid pace.
Key content drivers include:
■ Designer's blogs – This helps give consumers an inside look at designers' personal
lives and fashion picks.
■ Inspirational tips and pictures – Instagram and Pintrest have become vehicles for
brands to post inspiring pictures to and from consumers featuring their products.
■ How-To tutorials – This type of content helps instruct consumers how to wear or style
looks. This also helps establish and build expertise that keeps the consumer going
back to the brand.
■ Insider Industry Knowledge Content – Expanding platforms for industry content to
underscore brand expertise. For example online specialty wholesaler SurfStitch bought
magicseaweed which is the go-to source for surf reports and forecasts, reinforcing the
sites expertise on all things surf-related.
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17 March 2016
Distribution Considerations
We believe online brand building offers the same expansion opportunities as the traditional
3rd party model. In our opinion, brands that launch with an owned physical retail store tend
to stick to a retail exclusive model and typically do not expand into wholesale distribution
channels (such as Victoria's Secret, Gap, lululemon). Brands that start with 3rd party
distribution tend to keep that model and expand upon it, but may also open owned retail
stores and establish owned websites for eCommerce. Online start-ups begin with owned
eCommerce, but have the option to expand to physical retail stores or 3rd party distribution,
which we believe offers brands the same flexibility as the traditional model.
Advantages of 3rd Party Distribution: Lower fixed cost base, more opportunity for
multiple door expansion across geographies. Disadvantages: Lower IMU, some loss of
control on product placement and markdown strategy
Advantages of Owned Distribution: Full control of customer experience and product
presentation, Higher IMU. Disadvantages: Higher fixed costs, slower rollout to new
locations
Figure 14: Distribution Matrix
Distribution Mode:
Brand Building
Mode:
Department Store
Specialty Store
Retail Stores
Retail Online
eCommerce
Department Store
3rd Party Distributor
Traditional
Model
Owned Store
New Model
Owned Online
Source: Credit Suisse estimates
DC Build-Out, Seamless Inventory
Building out distribution centers and logistics infrastructure is a challenge and a big
expense for any brand, regardless of how a brand is launched. However, we believe that
brands built online already have the Omnichannel mentality integrated into their planning.
These brands are more likely to build out distribution capabilities from the onset with
seamless inventory already factored into the equation.
Traditional brand building models have historically siloed orders, and inventory, by
channel. This meant that brands built out logistics capabilities in this manner, and
consequently, has led to significant re-invests to convert the outdated, compartmentalized
systems so they are Omnichannel ready, a process which most traditional brands and
retailers are still working through.
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17 March 2016
What Does This Mean For Wholesale?
We believe the online revolution represents a shift in brand building, which is a separate
topic from distribution. We believe building a brand online represents a shift in cultivation
power away from the traditional model. Power is in the hands of the brands now more than
ever, with wholesalers increasingly relying on new, upcoming brands to help drive
relevance and traffic into their doors. That said, while we believe wholesale as a
distribution model is still relevant and necessary, the traditional models are transitioning to
fit into the new reality. Wholesale distribution still offers the greatest convenience to
consumers in the form of a one-stop-shopping marketplace. Wholesale as a channel has
expanded points of distribution as new online 3rd party distributors are added to the mix of
physical department and specialty stores.
■ Physical Stores Moving Online, Enhancing Omnichannel Capabilities. Traditional
indirect-to-consumer retailers have been working to streamline distribution
infrastructure and enhance website platforms in order to accommodate the shift in
spending. Retailers from Macy's to Wal-Mart are focused on eCommerce efforts to
make products available and transactions more efficient.
■ Expansion Of Online-Only Wholesale Operators. With the emergence of internet
start-ups, the wholesale channel has experienced a surge of online-only 3rd party
distributors. This is offers more incremental points of distribution for existing and new
brands.
Figure 15: Purchasing Behavior
Old Model
I need a new
bathing suit.
Search for product
in stores
Purchase in store
New Model
I need a new
bathing suit.
OR
Search for product Online
Purchase Online
Purchase in store
Source: Credit Suisse Equity Research
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17 March 2016
Investments In Digital
We expect traditional brands and retailers to increasingly focus on building or acquiring
this core digital competency.
Figure 16: Examples Of Companies Investing In Digital
Company
Investments
Nordstrom
Acquisition: Hautelook and Trunk Club Investments in: BaubleBar, Bonobos, and Shoes of Prey
Under Armour
Acquisition: MapMyFitness, Endomondo, MyFitnessPal, Gritness
Adidas
Acquisition: Runtastic
Asics
Acquisition: FitnessKeeper
Fossil
Acquisition: Misfit - designer and manufacturer of wearable technology products
Hudson's Bay
Acquisition: Gilt Group
QVC
Acquisition: Zulily
DSW
Acquisition: Ebuys
Amazon
Acquisition: Zappos
Source: Company data, Credit Suisse Equity Research
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17 March 2016
Connected Platforms
Mature brands that have already grown through wholesale, retail, and online channels are
looking to a new platform to help them reinforce brand strength and drive incremental
demand thru big data. Examples include Under Armour's investments in Connected
Fitness and Nike's investments in Nike+ platforms and apps.
Key Considerations For This Next Level Of Platforming:
■ Software vs Hardware: It can be challenging to determine how to build out connected
platforms. Nike exited their hardware Fuelband product to focus on software
applications such as Nike Running and Training Club platforms. Under Armour began
with software acquisitions (MapMyFitness, Endomondo) and has recently branched out
to launch hardware with HealthBox products.
■ Difficult To Implement: Connected platforms take digital to a new level of
sophistication and expertise.
■ Expensive To Set Up And Maintain: Building out and acquiring proprietary connected
platforms is an expensive endeavour.
■ Challenging To Monetize: While connected platforms provide personal interaction
with consumers and provide companies with massive amounts of data on purchasing
behavior and trends, ROIC can be difficult to measure.
Softlines and Retail
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17 March 2016
Online Brand Appendix
Figure 17: Online-Only Brands Across Accessories, Lifestyle, Personal Care, Men's, And Women's
Company
ONLINE-ONLY BRANDS
Website URL
Description
Accessories
Online fashion jewelry retailer with the ability to quickly
identify and merchandise trending products.
Baublebar
www.baublebar.com
OneGround
www.onegroundfootwear.com
Premium online shoe brand which "combines style,
creativity and innovation with unique European
craftmanship".
Proper Assembly
www.properassembly.com
Online-only backpack, tote and travel bag brand.
Shoes Of Prey
www.shoesofprey.com
Australian online-only shoe brand which allows consumer to
design personalized shoes; Nordstrom invested in the brand
in 2015.
The Arrivals
www.thearrivals.com
An outerwear and winter-accessories brand with no physical
stores; founded by a pair of architects.
Tortoise & Blonde Eyewear
www.tortoiseandblonde.com
Eyeglasses company for men and women which has
recently partnered with Urban Outfitters to open shop-inshops.
Warby Parker
www.warbyparker.com
Eyeglass and sunglass online brand founded in 2010; uses
a buy-one-donate-one model.
ADAY
www.thisisaday.com
Women's lifestyle brand that offers athleisure apparel which
can transition from day to night.
Endless Ammo
www.endlessammo.com
Iron & Resin
www.ironandresin.com
Outdoor Voices
www.outdoorvoices.com
Lifestyle brand that offers technical athleisure apparel for
recreational purposes; 2 stores in NY and Austin.
Rhone Apparel
www.rhone.com
Men's lifestyle brand that offers technical athletic apparel.
Lifestyle Brands
Softlines and Retail
Men's lifestyle brand based in San Francisco focused on
"utilitarian" apparel.
Lifestyle brand based in California selling apparel,
accessories, and outdoor equipment.
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Tracksmith
www.tracksmith.com
Waimea
www.waimealifestyle.com
Bonobos
www.bonobos.com
Buck Mason
www.buckmason.com
Lifestyle brand selling premium performance apparel
focused on track and running.
Lifestyle brand inspired by the surfing culture of Hawaii;
selling apparel, accessories, and equipment.
Men's Fashion
Men's fashion brand launched in 2007; now runs ecommerce shops and partners with Nordstroms.
Men's fashion brand for basic apparel, denim, and
accessories.
Personal Care & Beauty
Beauty Counter
www.beautycounter.com
Ecommerce beauty site with personal care and makeup
products that do not contain harmful chemicals.
The Honest Company
www.honest.com
Offers natural, non-toxic beauty, personal care, and
cleaning products; has started to move towards vendor
partnerships.
Bare Necessities
www.barenecessities.com
An underwear, swimwear, and loungewear online retailer
originally established in 1998.
Negative Underwear
www.negativeunderwear.com
Third Love
www.thirdlove.com
Women's Intimates
Online-only underwear brand offering minimalist, affordable
products.
Women's intimates retailer with an online app used to
collect consumer data and provide fit measurements.
Women's Fashion
Softlines and Retail
"Sister-label" to Bonobos, the women's online-only fashion
brand was launched in 2014; the brand now has a
wholesale partnership with Shopbop.
AYR
www.ayr.com
Cuyana
www.cuyana.com
Women's-only lifestyle brand with high quality "essential"
fashion pieces; urges consumers to follow their "few,
better" motto.
Eloquii
www.eloquii.com
Women's online plus sized clothing and accessories retailer;
the brand was spun off from The Limited in 2011.
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17 March 2016
Women's fashion apparel brand founded in 2010 with a
focus on pricing transparency.
Everlane
www.everlane.com
Industry Standard
www.industrystandardny.com
Women's jeanswear brand with a focus on providing direct
to consumer product made in America.
Lavish Alice
www.lavishalice.com
Women's fashion brand based in the UK inspired by trends
directly off the runway.
Love Culture
www.loveculture.com
Online-only women's fashion apparel brand offering trenddriven product.
Nasty Gal Inc.
www.nastygal.com
Women's fashion brand originally started as an eBay store
in 2006; has expanded to 2 brick-and-mortar locations.
Reformation
www.thereformation.com
Sole Society
http://www.solesociety.com/
Tautmun
www.tautmun.com
Tobi.com
www.tobi.com
Fashion brand selling women's apparel with a focus on
sustainable manufacturing.
Women's Shoes, handbags, and Accessories
Exclusive online women's fashion shop based out of
California with a "streetwear meets minimalism" aesthetic.
Women's fashion apparel brand emulating fast-fashion
products.
Source: Company data, Credit Suisse research
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Figure 18: Subscription Model Brands Across Accessories, Children, Personal Care, Men's, And Women's
Company
SUBSCRIPTION MODELS
Website URL
Description
Accessories
Women's online fashion jewelery subscription and rental
service.
RocksBox
www.rocksbox.com
ShoeDazzle.com
www.shoedazzle.com
Online fashion subscription service based in California with
a selection of women's shoes, handbags, and jewelry.
Sneakerbox
www.sneakerboxco.com
Subscription service for sneaker accessories and products.
Sock Panda
www.sockpanda.com
One-for-one men's and women's monthly sock
subscription.
Children's Apparel
www.sproutingthreads.com
Subscription based children's clothing service with brands
from over 50 top children's clothing lines and the ability to
exchange clothes as a child grows.
Bombfell
www.bombfell.com
Monthly personal stylist subscription box for men's apparel
and accessories.
Five Four Club
www.fivefourclub.com
Men's curated apparel monthly subscription service.
Hall & Madden
www.hallmadden.com
Men's dress shirt subscription service.
The Gentleman's Box
www.gentlemansbox.com
Trunk Club
www.trunkclub.com
Monthly personal stylist subscription box for men's apparel
and accessories.
Birchbox
www.birchbox.com
Online monthly subscription service for women's beauty
products launched in 2010; Birchbox Man launched in
2012.
Curator & Mule
www.curatorandmule.com
Men's accessories seasonal subscription service.
Dollar Shave Club
www.dollarshaveclub.com
Subscription service for men and women which delivers
razors and personal care products direct to consumers.
Harry's
www.harrys.com
Sprouting Threads
Men's Apparel
Premier monthly subscription box for men's apparel and
accessories founded in 2014.
Personal Care & Beauty
Softlines and Retail
Monthly subscription service for men which delivers razors
and personal care products direct to consumers.
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Ipsy
www.ipsy.com
eCommerce beauty subscription founded by you-tube
celebrity Michelle Phan.
Scentbird
www.scentbird.com
Monthly subscription box of designer perfume samples.
Elizabeth & Clarke
www.elizabethandclarke.com
Subscription service for women's basic tshirts and dress
shirts.
Fabletics
www.fabletics.com
Online subscription retailer that sells women's sportswear
and accessories.
Gwynnie Bee
www.closet.gwynniebee.com
Women's plus-size monthly apparel subscription service.
Le Tote
www.letote.com
Called the "Netflix-for-clothes," consumers can exchange
fashion apparel on a monthly basis or choose to buy.
Rent The Runway
www.renttherunway.com
Fashion apparel brand where consumers can rent designer
dresses at a discounted price or subscribe for unlimited
dresses a month; now opening showrooms in major cities.
Stitch Fix
www.stitchfix.com
Personal stylist online subscription service for women's
apparel and accessories.
Tog & Porter
www.togandporter.com
Personal stylist online subscription service for women's
apparel and accessories.
Wantable
www.wantable.com
Online women's subscription for a personal stylist service.
AdoreMe
www.adoreme.com
Subscription women's intimates business with the option to
pay-as-you-go or receive product monthly.
MeUndies
www.meundies.com
Online underwear subscription service; partnered with
Postmates for "same day, on-demand" products.
True & Co.
www.trueandco.com
Online women's intimates subscription service which uses a
proprietary online quiz to determine sizing.
Women's Apparel
Women's Intimates
Source: Company data, Credit Suisse research
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Figure 19: Online Marketplaces Across Flash Sale Sites, Lifestyle, Luxury, Mass Market, And Mid-Tier
Company
ONLINE BRAND MARKETPLACE
Website URL
Description
Flash Sale Sites
A private flash sale site for men and women across multiple
discounted designer brands.
Beyond The Rack
www.beyondtherack.com
Gilt Groupe
www.gilt.com
HauteLook
www.hautelook.com
Nordstrom's flash sale marketplace across multiple brands.
MyHabit
www.myhabit.com
Amazon's flash sale marketplace with product offerings
across designer handbags, designer footwear, and mid-tear
apparel brands.
Rue La La
www.ruelala.com
Members-only flash sale site for women's and men's midtier apparel brands and home goods.
Members-only flash sale site for women's and men's
luxury apparel brands; acquired by the Hudson's Bay
Company in 2016 to be integrated into Saks 5th stores.
Lifestyle Marketplaces
Online specialty marketplace that sells apparel and
equipment for outdoor recreation.
Backcountry.com
www.backcountry.com
Bona Drag
www.bonadrag.com
Founded in 2006, this online boutique specializes in vintage
apparel and jewelry brands.
Cold Lilies
www.coldlilies.com
Online marketplace for fine designer European jewelry
brands.
Fanatics
www.fanatics.com
Marketplace for officiallylicensed sports merchandise and
offers a collection of gear for multiple professional and
college teams.
Karmaloop
www.karmaloop.com
Online marketplace for streetwear; includes The Kazbah
(new streetwear designer marketplace) and PLNDR
(members-only flash sale site).
Koshka
www.shopkoshka.com
A boutique brand house for up-and-coming designers, this
Berlin-based market-place allows new designers to
showcase their work.
Moosejaw
www.moosejaw.com
Online specialty marketplace that sells apparel and
equipment for outdoor recreation; has moved into opening
brick and mortar locations.
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The Clymb
www.theclymb.com
Online lifestyle brand aggregator for outdoor equipment and
apparel.
The Dreslyn
www.thedreslyn.com
Lifestyle marketplace for women's apparel and accessories
across mid-tier brands.
SurfStitch
www.surfstitch.com
World's largest online actions sports and youth apparel
lifestyle brand retailer from Australia.
Farfetch
www.farfetch.com
Over 400 fashion boutiques with 1000+ luxury brand
offerings all under one eCommerce website.
Moda Operandi
www.modaoperandi.com
Online brand marketplace which offers pre-orders for trunk
shows by designer brands.
Net-A-Porter
www.net-a-porter.com
Premier luxury fashion brand online marketplace founded in
2000; part of the Yoox Net-A-Porter Group as of October
2015.
Oki-ni
www.oki-ni.com
Global online destination for a curated selection of men's
luxury menswear brands.
Ssense
www.ssense.com
Montreal-based online marketplace with luxury brands
across men's and women's collections.
The Outnet.com
www.theoutnet.com
Then And Now
www.thenandnowshop.com
YOOX
www.yoox.com
Amazon
www.amazon.com
Luxury Brand Aggregators
Discount women's designer online marketplace, created by
the Net-A-Porter group.
A luxury online retailer offering current designer collection
and discounted past collections.
Online lifestyle store for fashion apparel, design, and art
founded in 2000; part of the Yoox Net-A-Porter Group as
of October 2015.
Mass Market
Softlines and Retail
Mass-market brand aggregator for apparel, home goods,
electronics, and food; owns MyHabit, ShopBop, and
Zappos.
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Overstock.com
www.overstock.com
Online marketplace which specializes in heavily discounted
inventory across apparel, hard goods, and electronics.
Rakuten
www.global.rakuten.com
Japanese online marketplace with offerings across fashion,
beauty, and outdoor equipment.
Wanelo
www.wanelo.com
Online marketplace launched in 2012 with products across
apparel, furniture, and accessories.
Wish.com
www.wish.com
Mid-tier brand marketplace which is able to provide
extremely low prices due to wholesale relationships with
overseas vendors.
ASOS
www.asos.com
Online brand aggregator for mid-tier fashion apparel
brands.
Jack Threads
www.jackthreads.com
Originally a flash sale site, JackThreads is now a men's
brands destination with apparel, footwear, and accessories.
Revolve Clothing
www.revolveclothing.com
Online marketplace with a selection of mid-tier brands for
women's and men's apparel.
ShopBop
www.shopbop.com
Online retailer marketplace, launched in 2000 as a denimecommerce site; the site was acquired by Amazon in
2006.
Zappos
www.zappos.com
Mid-Tier Brand Aggregators
Shoe retailer founded in 1999 with a selection across
brands, styles, colors, sizes, and widths; acquired by
Amazon in 2009.
Source: Company data, Credit Suisse research
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Figure 20: Resale Brands Across Luxury And Mid-Tier
Company
Luxury Brands Resale
ONLINE RESALE
Website URL
Description
Bag, Borrow, or Steal
www.bagborroworsteal.com
Platform for luxury apparel and accessories rental, sale of
pre-owned goods, or purchase.
Portero
www.portero.com
Marketplace for pre-owned luxury goods founded in 2004
in New York.
Poshmark
www.poshmark.com
Marketplace for pre-owned luxury and mid-tier apparel and
accessories.
Vaunte
www.vaunte.com
Online marketplace for pre-owned luxury apparel and
accessories, often curated by industry experts.
Vestiaire Collective
www.vestiairecollective.com
Online community for pre-owned luxury apparel and
accessories founded in Paris in 2009.
Mid-Tier Brands Resale
Online resale site for apparel, electronics, furnishings, and
sporting goods.
eBay
www.ebay.com
The RealReal
www.therealreal.com
thredUP
www.thredup.com
Online consignment site for men's and women's apparel.
Tradesy
www.tradesy.com
Marketplace for pre-owned luxury and mid-tier apparel and
accessories.
Marketplace for pre-owned luxury and mid-tier apparel and
accessories.
Source: Company data, Credit Suisse research
Softlines and Retail
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17 March 2016
Companies Mentioned (Price as of 16-Mar-2016)
ASOS Plc (ASOS.L, 3089.0p)
Abercrombie & Fitch Co. (ANF.N, $31.63)
Adidas AG (ADSGn.F, €101.15)
Amazon com Inc. (AMZN.OQ, $575.79)
Asics (7936.T, ¥2,046)
Coach Inc (COH.N, $38.93)
Columbia (COLM.OQ, $59.47)
DSW Inc (DSW.N, $26.54)
Deckers Brands (DECK.N, $55.99)
Facebook Inc. (FB.OQ, $111.15)
Finish Line Inc (FINL.OQ, $17.77)
Five Below, Inc. (FIVE.OQ, $39.71)
Foot Locker, Inc. (FL.N, $63.57)
Fossil Group (FOSL.OQ, $44.14)
Gildan Activewear Incorporated (GIL.TO, C$38.6)
Hanesbrands Inc. (HBI.N, $28.98)
Hudson's Bay Company (HBC.TO, C$17.07)
L Brands, Inc. (LB.N, $87.07, NEUTRAL, TP $90.0)
Macy's Inc. (M.N, $43.01)
Michael Kors (KORS.N, $56.34)
Net-A-Porter (YNAP.MI, €25.48)
Nike Inc. (NKE.N, $62.1)
Nordstrom (JWN.N, $56.81)
Overstock com (OSTK.OQ, $14.54)
Phillips-Van Heusen (PVH.N, $87.15)
Ralph Lauren (RL.N, $95.47)
Saks Incorporated (SKS.N^K13, $15.99)
Saks Incorporated (SKS.N^K13, $15.99)
Surfstitch Group Limited (SRF.AX, A$1.38)
The Gap, Inc. (GPS.N, $29.07)
Tiffany & Co (TIF.N, $69.72)
Tumi Holdings (TUMI.N, $26.88)
Twitter (TWTR.N, $16.352)
Under Armour, Inc. (UA.N, $80.54)
Urban Outfitters (URBN.OQ, $31.66)
VF Corporation (VFC.N, $65.3)
Wal-Mart Stores, Inc. (WMT.N, $67.97)
Wolverine World (WWW.N, $18.1)
Zalando (ZALG.DE, €28.24)
Zumiez (ZUMZ.OQ, $19.13)
eBay Inc. (EBAY.OQ, $23.61)
lululemon athletica Inc. (LULU.OQ, $61.96)
Disclosure Appendix
Important Global Disclosures
Christian Buss, Michael Exstein and David Hartley, CFA each certify, with respect to the companies or securities that the individual analyzes, that (1)
the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his
or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
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3-Year Price and Rating History for L Brands, Inc. (LB.N)
LB.N
Date
09-Apr-13
23-May-13
08-Aug-13
26-Aug-13
11-Oct-13
09-Jan-14
12-Feb-14
07-Aug-14
21-Aug-14
10-Sep-14
09-Oct-14
06-Nov-14
20-Nov-14
04-Dec-14
05-Feb-15
26-Feb-15
21-May-15
10-Nov-15
19-Nov-15
04-Feb-16
25-Feb-16
Closing Price
(US$)
44.45
48.00
56.50
54.83
52.81
54.16
51.08
57.89
60.85
61.85
64.38
72.91
76.48
78.95
87.09
89.77
86.34
92.87
89.92
86.44
85.67
Target Price
(US$)
50.64
52.51
59.08
60.02
60.02
53.45
54.43
56.34
62.07
69.71
70.67
74.49
77.35
78.31
82.96
87.84
91.74
97.60
99.55
102.48
103.00
Rating
O
N
O
O U T PERFO RM
N EU T RA L
* Asterisk signifies initiation or assumption of coverage.
The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's
total revenues, a portion of which are generated by Credit Suisse's investment banking activities
As of December 10, 2012 Analysts’ stock rating are defined as follows:
Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months.
Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.
Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.
*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which
consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and
Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ra tings are based on a stock’s total
return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the
most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings
are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian
ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractivene ss of a stock’s total return potential within
an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An
Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned
where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18
May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7 .5%, which was in operation from 7 July
2011.
Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications,
including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other
circumstances.
Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24
months or the analyst expects significant volatility going forward.
Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or
valuation of the sector* relative to the group’s historic fundamentals and/or valuation:
Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.
Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.
Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.
*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.
Softlines and Retail
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Credit Suisse's distribution of stock ratings (and banking clients) is:
Global Ratings Distribution
Rating
Versus universe (%)
Of which banking clients (%)
Outperform/Buy*
58%
(38% banking clients)
Neutral/Hold*
30%
(27% banking clients)
Underperform/Sell*
11%
(45% banking clients)
Restricted
1%
*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, an d Underperform most closely
correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to
definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.
Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the
market that may have a material impact on the research views or opinions stated herein.
Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer
to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-andanalytics/disclaimer/managing_conflicts_disclaimer.html
Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot
be used, by any taxpayer for the purposes of avoiding any penalties.
Target Price and Rating
Valuation Methodology and Risks: (12 months) for L Brands, Inc. (LB.N)
Method: Our 12-month price target of $90 is based on an equal weighted average of 1) peer group multiples ($91), 2) A 5-year DCF ($93), and 3)
A long-term growth model ($85). We believe the stock will trade in line with its peer group, and accordingly, we have a Neutral rating.
Risk:
Risks to our $90 price target and Neutral rating for LB include macroeconomic risk, rising input costs, slower-than-expected expansion of
beauty, mall traffic declines, and licensee and franchise risk.
Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the
target price method and risk sections.
See the Companies Mentioned section for full company names
The subject company (COH.N, FIVE.OQ, TIF.N, TUMI.N, URBN.OQ, VFC.N, M.N, WMT.N, ADSGn.F, EBAY.OQ, FB.OQ) currently is, or was during
the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.
Credit Suisse provided investment banking services to the subject company (FIVE.OQ, TUMI.N, VFC.N, M.N, EBAY.OQ, FB.OQ) within the past 12
months.
Credit Suisse has managed or co-managed a public offering of securities for the subject company (M.N, EBAY.OQ) within the past 12 months.
Credit Suisse has received investment banking related compensation from the subject company (FIVE.OQ, TUMI.N, VFC.N, M.N, EBAY.OQ,
FB.OQ) within the past 12 months
Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (ANF.N, COH.N,
COLM.OQ, DECK.N, FIVE.OQ, GIL.TO, GPS.N, LULU.OQ, TIF.N, TUMI.N, UA.N, URBN.OQ, VFC.N, WWW.N, AMZN.OQ, JWN.N, M.N, ADSGn.F,
7936.T, DSW.N, FINL.OQ, EBAY.OQ, FB.OQ, SKS.N^K13) within the next 3 months.
As of the date of this report, Credit Suisse makes a market in the following subject companies (LB.N, ANF.N, COH.N, DECK.N, FIVE.OQ, GPS.N,
HBI.N, KORS.N, LULU.OQ, NKE.N, PVH.N, RL.N, TIF.N, UA.N, URBN.OQ, VFC.N, WWW.N, AMZN.OQ, JWN.N, M.N, WMT.N, DSW.N, FL.N,
EBAY.OQ, FB.OQ).
Credit Suisse has a material conflict of interest with the subject company (FB.OQ) . Credit Suisse has been named as a defendant in various
putative shareholder class-action lawsuits relating to Facebook, Inc.’s May 2012 initial public offering. Credit Suisse’s practice is not to comment in
research reports on pending litigations to which it is a party. Nothing in this report should be construed as an opinion on the merits or potential
outcome of the lawsuits.
For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.creditsuisse.com/disclosures or call +1 (877) 291-2683.
Important Regional Disclosures
Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.
The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse
does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events.
Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares;
SVS--Subordinate Voting Shares.
Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not
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For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.creditsuisse.com/sites/disclaimers-ib/en/canada-research-policy.html.
The following disclosed European company/ies have estimates that comply with IFRS: (ADSGn.F).
Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (FIVE.OQ, TUMI.N,
ZALG.DE, HBC.TO, M.N, WMT.N, EBAY.OQ, FB.OQ) within the past 3 years.
As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.
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Principal is not guaranteed in the case of equities because equity prices are variable.
Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.
To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important
disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research
analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the
NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a
research analyst account.
Credit Suisse Securities (Canada), Inc. ...................................................................................................................................... David Hartley, CFA
For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.creditsuisse.com/disclosures or call +1 (877) 291-2683.
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