Women’s Wear Daily
04.23.2014
business
business

Taking Stock: Consumer Confidence Drops in June...

ersistent fears about the job market gave rise to pessimism in June, ending three months of steady improvement.

business/news

CONSUMER CONFIDENCE DROPS: Persistent fears about the job market gave rise to pessimism in June, ending three months of steady improvement in The Conference Board’s Consumer Confidence Index. The June measure fell to 49.3 from a revised 54.8 in May. Both components of the index fell, with the Present Situation Index declining to 24.8 from 29.7, and the Expectations Index decreasing to 65.5 from 71.5. Until last month’s decline, the overall index and the Expectations Index had increased steadily since March, while the Present Situation had risen since April. Still, the number for June was higher than any month in the past year, with the exception of May. “The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Looking ahead, expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth.” In the June confidence survey, those who said business conditions are “good” slid to 8 percent from 8.8 percent in May, while those who said conditions are “bad” inched up to 45.6 percent from 44.5 percent. Those who said jobs are “hard to get” gained almost a full percentage point to 44.8 percent from 43.9 percent. Those expecting fewer jobs in the months ahead jumped to 27.3 percent from 25.6 percent last month; those expecting more shrank to 17.4 percent from 19.3 percent. — EVAN CLARK

LEGAL COUNSEL: Fashion firms seeking to curtail legal costs might want to think twice about unnecessary litigation, while those looking to make an acquisition shouldn’t shy away from distressed brands, according to presenters at a recent discussion hosted by the law firm Cowan, Liebowitz & Latman. Joel Karni Schmidt, a partner in the firm’s intellectual property group, noted that trademark disputes create a substantial cost, due to the accumulation of lawyers’ fees, as well as required consumer confusion surveys. Schmidt advised exploring mediation and arbitration as alternatives to litigation. Arlana Cohen, a trademark litigation specialist, told fashion companies to “trim the fat” from their portfolios, not only to cuts costs, but also to increase focus. Richard Kestenbaum, co-founder and partner at investment banking firm Triangle Capital LLC, called the current mergers-and-acquisitions environment “stormy,” but told attendees to be careful of “missing an opportunity because the first look isn’t pretty.” Firms on the prowl for a good buy need to remember that, often, the “best opportunities are hidden by a mess” at distressed brands. — MATTHEW LYNCH & VICKI M. YOUNG

SUPREME SPORTS: In a case that could affect exclusive licensing deals between major sports leagues and manufacturers such as Reebok International, the Supreme Court will revisit a case in which American Needle Inc., a manufacturer based in Buffalo Grove, Ill., sued the National Football League, National Football League Properties, its 32 teams and Reebok in 2004. In that case, American Needle, which manufactured apparel and footwear for the NFL for 20 years, alleged a violation of antitrust laws when the NFL entered into an exclusive, 10-year licensing deal with Reebok in 2001. However, American Needle lost its case last year in the Seventh Circuit Court of Appeals in Chicago, which ruled in favor of the NFL. In response to the upcoming Supreme Court examination, an NFL spokesman said, “We look forward to the opportunity to explain why the court should confirm and extend ... the favorable rulings of the Court of Appeals.” The National Basketball Association and National Hockey League filed “friend of the court” briefs in support of the NFL. Reebok declined to comment. American Needle attorney Glen Nager said the case “is about when, and [under] what circumstances, an independently owned business can ... be subject to antitrust law.” — KRISTI ELLIS

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