VF Corp, whose portfolio of clothing brands includes North Face, Wrangler, Timberland, laid out an ambitious new five-year target that would be the envy of almost anyone in the apparel industry

June 11, 2013, 5:43 p.m. ET

VF Lays Out Ambitious Growth Plan

By ANDRIA CHENG

VF Corp., VFC +0.57% whose portfolio of clothing brands includes North Face, Wrangler, Timberland and others, on Tuesday laid out an ambitious new five-year target that would be the envy of almost anyone in the apparel industry. The Greensboro, N.C., company, projects that sales will increase almost 60% to $17.3 billion over the next five years. The company already has a track record for strong growth: Last year sales hit $10.9 billion, up 42% over the five-year period from 2008, when sales totaled $7.64 billion. Given its strategy of buying labels to spur growth, acquisitions will continue to play a role as it aims for a five-year compounded annual sales target of 10%, with 8% “organic” growth and 2% growth anticipated from acquisitions. Read more of this post

Ferrari repositions for a one-horse race in ultra-luxury stakes; By creating a cult of exclusivity for their most expensive products, consumers will often shop for items lower down its retail chain in order to buy into brand exclusivity

June 11, 2013 4:32 pm

Ferrari repositions for a one-horse race in ultra-luxury stakes

By Rachel Sanderson in Maranello

At its headquarters amid the cherry orchards and Lambrusco vineyards of Emilia Romagna, Ferrari has built a reputation as haven of prosperity in recession-wrackedItaly. This year, while much of Italian business splutters, Ferrari is adding 250 jobs and handing out bonuses of at least €8,500 to its workers. But Luca di Montezemolo, 65, aristocratic chairman of the flame-red sports car maker, wants to pull even further away from the crowd. After a record €350m in trading profits in 2012 and on the cusp of the launch of its $1.3m LaFerrari, Ferrari plans to ensure its future success not by increasing output but by cutting back production this year by 400 cars to around 6,900 vehicles. Sitting at his red-leather topped desk at Ferrari HQ in Maranello, Mr Montezemolo sweeps back his signature floppy hair as he argues that after a record year for the business it is the ideal time to switch gear on strategy. “I’m talking about fewer cars but this does not mean fewer revenues or profits,” he says. “We want to increase the exclusivity of Ferrari. We want to maintain the value of the used car market. We want to develop the rest of the business like licensing and products.” Read more of this post

Hedge funds battered in quant arms race; Trend-following strategies sputter in volatile markets

June 11, 2013 5:53 pm

Hedge funds battered in quant arms race

By Sam Jones, Hedge Fund Correspondent

At the end of this month, a team of Cantabrigian hedge fund quants will attempt to wipe out rivals from Switzerland – in a computer game. Cantab Capital (assets under management: $6bn) will fight Zug’s Amplitude Capital in Battlefield 3. The gaming shoot out, part of an online league, is the smaller scale and lesser known version of two wars being fought between the biggest names in the quant hedge fund world. The other is more high stakes. A “quant” arms race, involving tens of billions of dollars, is on for big managers to find new markets and new models in which, and with which, to make money and outshine their rivals. Quant hedge funds have always been motivated to stay ahead of their peers, but in the past few years the struggle has intensified for good reason. So-called “trend-following” strategies – which have historically been at the core of what firms such as Man, Winton Capital, Cantab or BlueCrest Capital do – have sputtered since 2010, wrongfooted by range-bound, volatile prices in the futures contracts they trade linked to bonds and equities. Trend following does as it says: funds’ computers look for consistent moves in futures instruments and then follow them, up or down, until the trend reverses. Read more of this post

Australia’s covered bond boom is waning less than two years after the market started as yield-hungry buyers more than double purchases of RMBS

Australian Covered Bond Boom Wanes as RMBS Sales Double

Australia’s covered bond boom is waning less than two years after the market started as yield-hungry buyers more than double purchases of residential mortgage-backed securities.

Issuance of the debt, backed by the borrower and mortgages that stay on its balance sheet, fell 64 percent to $9.9 billion this year, data compiled by Bloomberg show. The decline in Australian offerings outpaced a 41 percent slump from banks worldwide, according to the data.

Renewed appetite for RMBS, as the market recovers after being decimated by the 2008 U.S. subprime collapse, has seen sales surge while banks reserve covered-bond allowances for when market conditions worsen. Commonwealth Bank of Australia (CBA)’s 2017 covered securities offered just 33 basis points more than swaps last month, compared with a 47 basis-point premium on shorter-dated unsecured notes sold by Westpac Banking Corp., Bloomberg-compiled data show. Global financial debt pays a 141 basis-point spread, Bank of America Merrill Lynch data show. Read more of this post

Swedish Credit Drives Frenzy in Dragon Tattoo Quarter

Swedish Credit Drives Frenzy in Dragon Tattoo Quarter

One of Stockholm’s most popular attractions is a guided tour of the Soedermalm district streets featured in Stieg Larsson’s bestselling book “The Girl With The Dragon Tattoo.” Buying a home in the former working-class neighborhood is far less accessible.

A one-bedroom, 55-square meter (592-square feet) apartment in Hoegalidsgatan, in the neighborhood where Larsson’s troubled heroine Lisbeth Salander grew up, sold last month for 3.75 million kronor ($569,000), 17 percent above the listing price, after a bidding war involving nine parties.

That level of demand is typical in the Swedish capital, where a shortage of construction, a population boom and mortgage rates below 3 percent have pushed prices in central Stockholm up 35 percent since early 2009. Borrowing for home purchases has in turn fueled record household debt across the country. That’s sparking concern among policymakers over potential damage to the economy and preventing the central bank from cutting rates, even as Sweden’s exporters say action must be taken to weaken the currency to protect thousands of jobs. Read more of this post

Nestle’s Nespresso to Face New Mondelez Copycat Capsule

Nestle’s Nespresso to Face New Mondelez Copycat Capsule

Mondelez International Inc., (MDLZ) the world’s second-biggest coffee maker, will start selling Nespresso-compatible capsules across Europe this fall, posing the sternest competitive challenge yet to the Nestle SA (NESN) brand. Mondelez, based in Deerfield, Illinois, will sell the knock-off capsules under its Jacobs and Carte Noire brands in Germany, France, Austria and Switzerland in the second half of 2013, Roland Weening, vice president of strategy, marketing and innovation, said in an interview in London yesterday. The move brings a deep-pocketed entrant to the fastest-growing part of the $80 billion global coffee market at a time when Nespresso’s growth has slowed. Nestle, of Vevey, Switzerland, has filed patent-infringement lawsuits against some rivals that introduced capsules compatible with Nespresso machines, yet to date has not been able to stem the flow of copycat capsules from producers including D.E Master Blenders 1753. (DE) That comes as Nestle has said sales growth this year may be at the low end of its long-term target. Read more of this post