BTIG: Consumer retail and lifestyle brands industry report

February 21, 2023

DECK Product Launches, RCKY License Agreement, Puma NFT Launch, Savage x Fenty Rolls Out Fit Technology

WHAT YOU SHOULD KNOW: Retail Details is our weekend 'light reading' update note covering industry reads with implications for our coverage, tidbits across our covered companies, and developments across the private company ecosystem. In this week's note, we highlight DECK's new product launches, RCKY's accessories licensing agreement, Puma's NFT launch, and Savage x Fenty employing new fit technology.

DECK (Buy, $515 PT) launches new products across HOKA, UGG, and Teva. On 2/15, HOKA debuted the Clifton 9, a new version of its popular training shoe that isfour grams lighter than the Clifton 8 (launched May 2021), with 3mm of additional stack height for a more comfortable, plush feel. UGG debuted the CA1, a sporty, chunky sneaker designed to "create the illusion of longer legs" (see Exhibit 1). Teva also debuted its spring 2023 collection, including the Geotrecca Low RP, a waterproof hiking sneaker made of recycled materials, which follows the successful release of the Geotrecca Mid in Fall 2022. OUR TAKE: We believe a strong product pipeline with a consistent pace of innovation has been the key factor behind DECK's recent success, as it has resulted in continued customer interest and created a more diversified product engine that is less reliant on any one style. Store checks this week across Foot Locker (Buy, $55 PT) and REI (private) showed HOKA prominently displayed and selling at full-price (See Exhibits 2 and 3).

Rocky Brands (RCKY, Neutral) Enters Accessories License. Rocky Brands has entered into a license agreement with Status Accessories to design and distribute belts and wallets for its Durango and Rocky brands (to debut winter 2023). The collections will leverage design elements from the existing footwear collections (e.g., detailed stitching on leather for Durango, camouflage and heavy-duty nylon material for Rocky). OUR TAKE: As we detailed in our initiation, Rocky's has assembled a strong stable of brands across the premium outdoor, western, and work footwear spaces. Expanding into accessories via licensing agreements is a logical move both from a financial perspective, given the high-margin, recurring revenue stream of the licensing structure, and from a brand standpoint, as the extension into complementary categories allows for a greater brand presence.

Puma (PUMA-ETR, Not Rated) to launch NFT as part of 75th anniversary celebration. Puma announced the planned launch of the 'Super PUMA PFP NFT' (10,000 planned to launch in late February). The NFTs will be Web3-enabled interpretations of PUMA's cartoon mascot and can be used as profile pictures on social media, as has been the case with many of the more popular NFTs (CryptoPunks, Bored Ape Yacht Club). OUR TAKE: We expect to see many companies continue to explore NFTs and Web3 in general as part of their broader marketing strategies. NFTs allow brands to create items that are covetable and collectible, while also driving engagement within their community of consumers.

Savage x Fenty (private) partners with FIT:MATCH. Rihanna's intimate apparel brand Savage x Fenty has begun rolling out FIT:MATCH technology in its retail stores, beginning with a store in Atlanta, GA and then to be followed by the remainder of the growing fleet. This follows a strategic investment the brand made in FIT:MATCH in January of 2022. FIT:MATCH uses body scanning tech to create an anonymized avatar based on the customer's shape and then pairs this data with a database of products most likely to fit. OUR TAKE: Optimizing for fit is one of the key challenges apparel brands face, especially in the intimate apparel sector. We expect to see many brands experimenting with, and in some cases investing in, fit technology to drive conversion, loyalty, and lower return rates (key for online players).

View the full report HERE.

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