Herdstreet - Finance & Market News/Blogs

Write-Offs: 07.02.09

Dear Third Point People

Bonus Watch '09: Citi

Citi Gives GE The Heisman

Swine Flu At Deutsche Bank? (UPDATE)

Presented By:

CNBC (Wardrobe Department) Has Heeded Your Call For More Amanda Drury

Alec Baldwin Takes Issue With Madoff Sentencing

Bank CEOs Have A Lot To Learn About Spending Taxpayer Money

Someone's Going To Give Himself A Hernia

Portfolio.com

The Future of Reproduction: The Birth Business

The Future of Reproduction: Male Pregnancy

J.P. Morgan Is No. 1

Spring Cleanup

With retailers still suffering from excessive inventories, the spring cleaning has begun.

Coming off the nightmare of fall's early and aggressive markdowns, the first spring price cuts are already budding, particularly in the luxury tier and women's categories where the cadence of deliveries is quicker than menswear. Last week alone, Bergdorf Goodman advertised up to 40 percent off on its contemporary floor, and Yves Saint Laurent sent an email invitation to customers to receive an "exclusive one-time discount" at any boutique in the U.S. and 50 percent off ready-to-wear and 30 percent off accessories Wednesday.

Sample sales are on the rise, too, with stores pushing back goods to vendors. And some retailers are utilizing sales tactics usually reserved for holidays and pre-Christmas. Last week, for example, J.C. Penney Co. Inc. ran two days of doorbusters including dresses, Arizona, and other private-label products, and a buy-one-get-one-for-88 cents deal on a host of items. Neiman Marcus Inc. has offered various incentives this season to members of its InCircle reward program, such as free lunch at restaurants in the store and $50 gift cards. The website has also been promoting free shipping through today. Macy's Inc. ran a three-day fine jewelry sale with 30 to 50 percent off much of the assortment.

So-called "private" friends and family sales have taken a high profile. Saks Fifth Avenue staged one last week, and promoted it on the homepage of its website.

Nordstrom followed with a friends and family sale of its own, and this week, it's Bloomingdales' turn, offering 20 percent off almost all regular- and sale-priced purchases in apparel and home.

"People are going deeper, earlier," said Brendan Hoffman, president and chief executive officer of Lord & Taylor, characterizing the state of markdowns this season so far.

The situation has fueled speculation over when the major spring clearances will break and who will be the first out of the gate. Typically, department stores roll out spring clearances around Memorial Day, while higher-priced specialty chains pull the trigger around mid-May to make space for June's pre-fall deliveries.

At Nordstrom, which clears a lot of merchandise through its extensive network of Rack outlets, a spokeswoman suggested the inventory situation was under control. "We continue to feel that we are appropriately managing our inventory and are getting ready for the women's half-yearly sale, which is in May," she said.

Analysts and retailers expect clearances to surface before Mother's Day, with stores currently grappling with spring orders written last year—before consumers really clamped down on spending—and trying to whittle inventories down in line with demand. "Historically, I would not have considered markdowns before the beginning of June," said Diane Levbarg, executive vice president of Missoni. "However, this year, while it's still too early, I may reevaluate my strategy based on market conditions."

Aside from the rising unemployment rate and uncertainties about the economy, the late Easter and the late arrival of springlike temperatures to most of the country have contributed to disappointing apparel sales this season. In addition, push backs to vendors have sparked many more sample sales.

However, retailers and analysts contacted Monday emphasized that discounting hasn't reached clearance proportions yet, and that when the clearances do break, they shouldn't be anywhere as epic as the fall's avalanche of price cuts.

"I don't think that it's anywhere close to the degree and depth of what was experienced in the fall," observed Arnold Aronson, marketing director of retail strategies for Kurt Salmon Associates. "There's more of a gradual realignment of inventories to sales levels."

Spring markdowns and clearance tactics will include more retailer-vendor discussions than in the past, Aronson suggested. "There won't be huge surprises, or unilateral kinds of decisions," he said. "At this point, it's primarily first markdowns happening earlier than normal. Stores are not into clearance mode yet."

Jeffrey Kalinsky, founder of Jeffrey designer stores in New York and Atlanta, said he hasn't taken "a single markdown" or run any promotions. Competitors have been taking markdowns since January, he said, adding, "A lot of people do promotions under the guise of 'friends and family.' No one has broken sale yet, to my knowledge."

"Normally, in a good year, you wouldn't even be having this conversation" about markdowns, said one specialty store retailer. "It's too early. It's much, much, much too early. Nobody wants to be the first [to break price] because they're terrified of what happened with Saks [last holiday]. There's such a backlash because of markdowns taken last November that people don't want to go on sale. Business is challenging and I'm waiting to see if it gets more challenging.

"Would I love to go on sale now?" asked the retailer. "Yes. Everybody has too much inventory. Nothing's selling right now."
Store executives differed on whether a "friends and family" event should be considered a sale. "I don't see friends and family as a markdown," said a luxury retailer. "Saks' friends and family offer is for 20 percent off. A sale is 40 percent off. To me, 20 percent is an hors d'oeuvre. It's maybe an incentive. Everybody's giving some type of incentive. They're all doing something out the back door."

"Nobody is experiencing great business," said an owner of a fashion boutique. "What am I going to do if a huge retailer like Saks or Barneys [New York] does a major markdown again? It's not easy out there. We're not set up to do anything like promotions."

Stanley Korshak hopes to stick to its same schedule as last year by marking down resort and some spring the first week of May, and the remainder in June.

"If Neiman's and Saks pull the plug and we are forced into reacting, then we'll do what we have to do, but we do not have inventory issues," said owner Crawford Brock. "We are barely missing our plan, which is about 30 percent down from last year. But we made money in the first quarter and in February and March, and we did it by cutting expenses—not by selling more."

All things being relative, the best businesses have been contemporary, young designer, bridal, men's shoes and belts, and private label goods, Brock said. Gowns, handbags, shoes, and denim are weak. "Shoes and bags are tough, and I think it's a price point issue," said Rose Clark, general merchandise manager. "Louboutin is still our No. 1 vendor, but it's expensive, as are Jimmy Choo and Valentino."

"The knee-jerk constant promotions that everyone had to deal with last fall were very detrimental, so we made a strong effort not to do that again this year," said Mickey Rosmarin, owner of Tootsies, which has stores in Houston, Dallas, and Atlanta. "We will mark down resort and some spring the last weekend in April."

Rosmarin said Bogner and Ralph Lauren have done well but, in general, sales trends have been inscrutable.

"Gowns are not selling, but prom dresses and other dresses are doing great," he said. "Some Italian sportswear is blowing out and some is dead as a doornail. It's almost no rhyme or reason."

Due to students on Easter vacations, traffic in malls has recently risen, according to Amy Wilcox Noblin, research analyst at Pali Capital. "This week kicks off new early summer product arrivals in stores and this is a transition period for some retailers in terms of promotions. But overall, retailers have either increased or sustained the heightened level of promotions to capitalize on the traffic," Noblin wrote in a report issued Monday. "Some store associates have theorized that traffic will drop post-spring break and we can detect a sense of nervousness about what the back third of April will bring."

Noblin observed American Eagle Outfitters Inc. is already displaying some early summer goods at full price and, therefore, experienced some slower traffic with fewer promotions. However, the store is running an all-shorts-under-$25 promotion, which is 30 to 40 percent off on average, and the new summer goods reflect "progress" in fashion, Noblin stated.

Tourists and teens off from school flocked to the Abercrombie & Fitch flagship on Fifth Avenue, though A&F branch stores did not show such traffic surges, Noblin wrote. Some early summer product has arrived, "but the majority still lacks enough fashion innovation necessary to entice customers to pay full price."

Pacific Sunwear, on the other hand, saw an uptick in traffic last week that's been sustained this week. "Significant promotions remain this week," touching up to 75 to 80 percent of the assortment, Noblin noted.

In the Air

The first celebration of Earth Day, on April 22, 1970, was a raucously exuberant affair. In New York, Fifth Avenue was closed to traffic. People picnicked on the sidewalk; dead fish were dragged through midtown; and Governor Nelson Rockefeller rode a bicycle across Prospect Park. Students in Richmond, Virginia, handed out bags of dirt (to represent the "good earth"); demonstrators in Washington poured oil onto the sidewalk in front of the Interior Department (to protest recent oil spills); and in Bloomington, Indiana, women dressed as witches threw birth-control pills into the crowd (no one was quite sure why). All told, some 20 million Americans took part—far more than the man who thought up the occasion, Senator Gaylord Nelson, Democrat of Wisconsin, had expected. "That was the remarkable thing about Earth Day," Nelson later said. "It organized itself."

Among those who seemed unmoved was President Richard Nixon. He avoided the festivities and made no public comment on them. (One of his aides, John Whitaker, later acknowledged that the administration had been "totally unprepared" for the wave of environmental activism "that was about to engulf us.") Nevertheless, even Nixon seems to have got the message. Three months afterward, he created the Environmental Protection Agency and the National Oceanic and Atmospheric Administration, and five months after that he signed the Clean Air Act. The Clean Water Act, the Pesticide Control Act, the Endangered Species Act, and the Safe Drinking Water Act all became law by the end of 1974.

Since the mid-1970s, the nation's environmental agenda—to the extent that it has had one—has consisted mainly of trying to defend these early achievements. This is all the more notable because of what has happened in the intervening years. At the time of the first Earth Day, the term "global warming" was barely in circulation—the relatively small group of scientists concerned about the consequences of rising CO₂ levels used the phrase "inadvertent climate modification"—and actual warming had yet to be clearly detected.

Today, of course, there are thousands of scientists studying global warming, and new effects are constantly being observed. Just a few weeks ago, researchers reported that Antarctica's Wilkins Ice Shelf had "begun to collapse because of rapid climate change." The ice shelf was larger than the state of Connecticut; it now seems destined to disappear. "We've come to the Wilkins Ice Shelf to see its final death throes," a glaciologist with the British Antarctic Survey, who made a farewell trip there, told Reuters.

To do something meaningful about global warming will require legislation even more far-reaching than the Clean Water Act and the Endangered Species Act, and recently there have been encouraging signs that Congress and the White House understand this. Late last year, Henry Waxman, of California, an outspoken advocate of action on climate change, wrested control of the House's Energy and Commerce Committee from John Dingell, of Michigan, an outspoken advocate of delay. A few weeks ago, Waxman introduced a comprehensive energy bill, which, while flawed, at least represents a starting point.

President Barack Obama, for his part, has been clear about the urgency of the problem; shortly after taking office, he observed that global warming, "if left unchecked," could result in "irreversible catastrophe." To guide him, he has assembled some of the most knowledgeable and thoughtful people in the nation. What has been called Obama's "green dream team" includes Energy Secretary Steven Chu, a Nobel Prize winner; the White House science adviser, John Holdren, a physicist on leave from Harvard; and the NOAA administrator, Jane Lubchenco, a highly regarded marine ecologist. In a move that has been widely interpreted as a prod to Congress, the EPA last week designated carbon dioxide and five other greenhouse gases as pollutants. This is an important step forward, which the Bush administration spent two years and millions of dollars of taxpayer money dithering about. The designation initiates the regulation of CO₂ under the Clean Air Act, a process that could eventually affect most major industries in the United States.

Still, there are plenty of reasons to wonder whether serious steps to reduce carbon emissions will be taken this year or, indeed, ever. Regulating CO₂ using existing laws will be a laborious, and potentially litigious, exercise. Meanwhile, the administration has been strangely passive about trying to shape climate legislation—one reason that the Waxman bill is likely to be further watered down. Then there's the question of whether even an inadequate bill has the votes to pass.

Three and a half decades ago, when the nation's key environmental laws were approved, politicians were responding to the mood of the country. Today, the situation is largely reversed. Polls show that voters regard the environment in general, and climate change in particular, as, at best, a middling concern. In a recent survey, the Pew Research Center asked Americans about their priorities for Congress and the new president. "Dealing with global warming" ranked at the bottom of a list of 20 choices, far below "strengthening the nation's economy" and "reducing health-care costs," and even below dealing with unspecified "global trade issues."

The recession seems to have dampened the nation's enthusiasm for any measure that could affect—or, perhaps just as important, be portrayed as affecting—people's pocketbooks. Last month, when Gallup asked Americans whether "protection of the environment should be given priority, even at the risk of curbing economic growth," only 42 percent said yes. This was the lowest proportion in the 25 years since the firm started asking the question. Results like these do not make action on climate change any less imperative. But—especially since opponents can be counted on to spend tens of millions of dollars on lobbying—they do make it that much less likely.

This week, when Earth Day turns 39, the New York City Department of Parks and Recreation will plant trees. The Interior Department will host a fair in Washington's Rawlins Park, and in Bloomington, volunteers will teach sixth-graders about karsts and creeks. As perhaps befits a middle-aged celebration, these are all eminently reasonable activities. But Earth Day has lost its edge and, with that, the sense that a different world is possible. Even more than in 1970, what's needed now is an outpouring that organizes itself—with millions of people and, for good measure, some stinky dead fish in the streets.

Presented By:

You Need the Speed of Norton 2009

Introducing the revolutionary Norton Internet Security 2009. With a one-click, one-minute install, under 7MB of memory usage and fewer, shorter scans, it’s the fastest security suite anywhere. Get your FREE trial today!
Click to Learn More www.norton.com/speed

Ads by Pheedo

Buying at the Bottom

Davis Nguyen thought long and hard about investing in foreclosed homes, but plunging interest rates convinced him that it was time to dive into the housing market.

So the San Jose, California, man bought not one, but two investment properties.

"I decided to jump in because the sales price is reasonable to make a long-term investment," Nguyen said. "I'm looking for something that is easy to rent because I need to make a little bit of profit."

Since last fall, Nguyen began looking for three-bedroom, two-bath homes ranging in price from $290,000 to $350,000 in three zip codes: 95121, 95148, and 95112.

With the help of Paul Conti, a residential broker with Altera Real Estate Services, Nguyen became one of dozens of investors who have decided that bottom or not, 5-percent interest rates are too good to pass up.

"I think it's a great idea," said Quincy Virgilio, president of the Santa Clara County Association of Realtors. "You need investors in our residential marketplace to help move that inventory. The amount of people looking for rentals has been displaced, and you couldn't pick a better time for buying."

As with any investment, performing due diligence on the property is key.

Marylou Wathen, an agent with Key Realty and Lending of San Jose, advised investors to "go through each home with a fine-tooth comb."

"You have to do your homework. A lot of homes are not in livable condition," she said. "Sometimes people are so angry, they destroy their homes by taking the sinks and the appliances."

Wathen said she recently handled a sale in Willow Glen where the owners gutted the house, walking away with the fixtures and air-conditioning unit.

She also advised investors to check public records to ensure the square footage is accurate, determine whether the price is low compared with other sales in the neighborhood, and find out how much work will be required on the house before it can be rented.

"A good investor will know the answers to these questions," Wathen said. "And they will know where the rental market is going. I think it's a good investment opportunity if you buy a fixer-upper and hold onto it," she said. "This is not a flipping market."

Conti said bargains seem to be everywhere because prices have fallen several hundred thousand dollars below what they sold for just two years ago, but it's still wise to be cautious.

"It's definitely a good investment opportunity, but if you invest in areas hit hard with foreclosures, the appreciation historically is not really good," he said. "The question is: What's the appreciation? When you see appreciation, you will see equity grow."

The Future of the Phone: The End of the Cell

ost Americans now have mobile phones, and a Nielsen Mobile report last year found that nearly one in five of us have cut the cord, abandoning our landline service entirely. Danny Kessler of Tempe, Arizona, is one of those people, except he has gone the next step: He recently gave up his cell-phone contract too. Kessler's no hermit: He's a 27-year-old personal-safety instructor who has to be in touch with his clients. He just does all his telephoning via the internet. Today Kessler is an anomaly, but internet telephony (a.k.a. voice-over-internet-protocol, or VoIP) is in a position to dominate the phone business of the future just as mobile usurped the throne of the hard-wired handset.

It may seem outlandish to imagine the phone networks being supplanted by VoIP, which is currently hobbled by spotty internet access and mobile carriers protecting their interests. But only a few years ago it would have seemed equally unlikely that Americans would jilt stable old Ma Bell in favor of their bulky, glitchy, expensive mobile phones. Yet VoIP has one huge factor in its favor: It is very, very cheap. Kessler pays $18 per month for his phone service, a figure that, in his words, "is a lot less expensive than a traditional phone." In the middle of this economic crunch he's not alone in his thinking, and already VoIP is starting to turn some $40 landlines and even mobile contracts into unnecessary luxuries: According to a recent Yankee Group report, 5.2 percent of Americans already use VoIP as their primary home phone.

What allowed mobiles to decimate the traditional phone market was comprehensive, reliable portability—the assurance that you could make and receive calls basically anywhere you went. Before it can replace them, VoIP will have to be a lot more portable too. At the moment, internet telephony generally works best over wired or WiFi internet connections. Recently, however, VoIP became available for the phone-contract-free iPod Touch, making it functionally as much a phone as the regular iPhone, except without the two-year AT&T contract.

The catch, however, is that to use VoIP from a mobile device like the iPod Touch (or, for that matter, an iPhone) there must be a wireless hotspot handy. Yet, there are a couple of reasons to think that WiFi may become as ubiquitous in the next few years as cell-phone coverage is now. One possibility is that omnipresent wireless internet access may come to be considered a basic public utility—something any modern city provides as part of its infrastructure. Philadelphia, for instance, has been struggling for a few years to set up a citywide WiFi network; Mountain View, California, has cracked the problem by having Google take care of it.

Another possibility is that mobile networks that already exist will open up to VoIP companies like Vonage, Skype, and Google Voice. That's a scary prospect for them, because it effectively redefines them from "the company you pay for mobile-phone service (and maybe get some data over your phone too)" to "the company you pay for your handheld computer to be connected to the internet." In other words, wireless carriers will have to lower their drawbridges and allow two-cent-or-less-a-minute VoIP calls (for which they're not getting paid at all) to compete with their current, much higher rates. Those rates would have to fall, because if one can make calls via VoIP over an internet-enabled handset, there would be no reason to pay a premium for cell-phone minutes. The mobile networks might have to get used to the new financial reality pretty soon, though: the WiMAX data carrier Clearwire is already testing VoIP phones for its network in Portland, Oregon.

In the meantime, Kessler has discovered that today's limited WiFi access already lets him be as mobile as he needs to be. "A lot of places now have free WiFi," he says. "I operate in an office affiliated with Arizona State—it's got a big WiFi hotspot. Any place there's a computer, I can log into Skype and plug in my headphones." So far, he claims, he hasn't run into any situations where he's needed to make a call but hasn't been able to get online. "It hasn't been much of an issue. I respond pretty fast to most communication, but I find after having a cell phone for 10 years I like to shut everything down and have time for reflection."

Related Links
Open Mobile Internet Now!
McCaw's Next Bet
AT&T's Open-Source Phone Plans

The Future of the Phone: Dialing for Dollars

Crichton's Last Thriller

Memorable Marketing

Surprise marketing is Target previewing Alexander McQueen at a pop-up store on Manhattan’s far West Side. It’s a phone number on customized Levi’s jeans that leads to the brand’s concierge service.

It’s not simply offering excellent service or quality products.

Although many marketers are hitting notes considered comfortable and familiar because of the recession, sounding chords of surprise has merits, marketing consultant Andy Nulman said. This form of marketing creates a sense of “pow,” versus those moments of “wow,” he explained. It’s the difference between “total shock” (pow) and “exceeding expectations” (wow), like the difference between a “major upset” in sports (pow) and a “great game” (wow), or a “new hair color” (pow) and a “haircut” (wow).

“It can make it more palatable, more bearable to take something on” in a weak economy, said Nulman, the author of Pow! Right Between the Eyes (John Wiley & Sons; $22.95). “It can give you a jolt. You may not buy, but you’ll get a lift from it.”

Surprise is stumbling upon Target’s McQ Market, which was so far over on lower Manhattan’s West Side it was practically in the water. Surprise marketing is finding the gift of a commemorative Citi Field key fob on opening day on a table at Blue Smoke, a Danny Meyers restaurant in the FlatIron District with an outpost at the Mets’ new home. It’s viewing a silent, 30-second TV commercial for Carmel Car and Limousine Service on ESPN, CNN and MSNBC in which the nationwide firm promises in words crawling across the screen: “In times of economic turmoil, we want to give you a moment of peace and quiet…on us.”

Surprise marketing offers “quality that fascinates,” such as Nulman experienced in a visit to Japan, where he rode in taxi cabs with “lace-covered seats,” was offered umbrella covers at stores so the umbrellas didn’t drip while he shopped, and was provided with “sparkling clean” shirts and shorts to wear for his workout at a gym.

Nulman said surprise marketing moves beyond “quality that is expected,” beyond the quality that would characterize, say, enjoying a good meal from Whole Foods or discovering cutting-edge designer fashions from Barneys New York.

Taking things out of context is one way to stir surprise, like playing classical music in a locker room before a big game, serving Coca-Cola in Champagne flutes, or as Nulman put it in “Pow!”: “Anything that switches two norms into one abnorm.”

This tactic was used in February at Target’s McQ Market, one of 10 pop-ups it has staged since its first temporary shop in 2002. The pop-up provided a sneak peak for shoppers and potential buzz for Target: McQueen’s apparel and outerwear, priced from $19.99 to $129.99, wasn’t being sold at the chain until 18 days later.

By the second afternoon—Feb. 15—of a two-day, limited engagement, more than 1,000 fashion aficionados and others had found their way into the Target McQ Market, which housed Alexander McQueen’s new McQ collection that drew a total of about 4,800 visitors, including guests at a preview for celebrities and media, said Joshua Thomas, a Target spokesman. The dates were chosen to coincide with New York Fashion Week.

Photo by Philip Gaedicke for highsnobiety.com

(For more of Philip Gaedicke's photos of the Target McQ Market, click here to be taken to the site HighSnobiety.com.)

Sitting across West Street from the Hudson River, with traffic zipping by at high speed, the shop could have been easy to miss. It temporarily occupied the ground floor of an empty warehouse, the entrance marked by split plastic drapes (think car wash), metal pins “piercing” the facade, arrow-in-Target-bull’s-eye stencils, and the spray painted graffiti: “Target McQ Market.”

The element of surprise continued inside. Dim lighting, androgynous poster models in klieg spotlights (“Rebel looks. Civil prices.”), and DJ Mel DeBarge spinning dance tunes like “December 1963 (Oh What a Night)” and “Could You Be Loved” set the scene for the McQ collection’s unisex styles.

The works of 10 New York City-based artists, such as paper sculptures with gesso and enamel by Chris Caccamise and computer screen savers by Trisha Baga, sprung from the shop’s clubby atmosphere. Curators roamed and engaged visitors in conversation. The pieces were chance finds amid apparel displays set in front of chain-link fences and rough-hewn, painted plywood.

“I like to present work in a different context for people who aren’t the usual art people,” said Caccamise, who didn’t expect to be sought by fashion production house OBO to create two sculptures for Target’s pop-up. A sense of the unlikely also inspired his “Fashion Designer ’09” and “Pat Benatar 1980,” pieces bringing the artist a $1,000 commission. An Alexander McQueen quote in The New York Times about the designer’s new venture with Target—“I’m bringing my culture to them”—struck Caccamise as “funny” and a show of “hubris,” and it became a type element in the “Fashion Designer ’09” sculpture.

Another surprise tactic was exemplified in a huge Domino’s Pizza giveaway that resulted from a computer snafu. It qualified for what Nulman, president of marketing agency Airborne Mobile, calls time-bombing, or “secrecy up front, explosiveness down the road.”

On the last day of March, Domino’s was scrambling to shut an inadvertent freebie: It mistakenly gave away $90,000 worth of pizzas, with one topping, at shops nationwide, many of them in Cincinnati and Salt Lake City. Playing around with key words in Domino’s online search engine, someone entered the word “bailout,” which still appears in the Web site’s Big Taste Bailout promotion. This triggered credit for a free medium pie at their local shop’s electronic cash register, even though the deal hadn’t been green-lighted at corporate headquarters.

When the dust cleared, 11,000 pizzas had been given away, as the password spread quickly online. In a show good faith (and humor) to people disappointed when it nixed the giveaway, Domino’s offered a free dessert order of Cinna Stix via blogs that had spread the “bailout” password and in cell-phone text messages to customers in its opt-in marketing program, said Tim McIntyre, vice president of communications at Domino’s Pizza Inc.

Marc Gobé, chief executive officer of Emotional Branding, believes people need change—and when faced with too much similarity they will disconnect.

Brands that surprise people can communicate with them, Gobé has said.

On Election Day, Oren’s Daily Roast, a New York City chain of coffee shops, introduced and gave away “Blend 44” coffee consisting of beans symbolizing and chuckling over Barack Obama’s Kenyan and Hawaiian (Kona beans) roots, his days at Harvard Law School (Ethiopian Harrar) and his two years at Occidental College in Los Angeles (L-a Minita Costa Rica.) The joke also references the 44th U.S. president’s junior and senior years at Columbia University and his family’s new District of Columbia address, with two kinds of Colombian beans.

Upon spotting a phone number on the right thigh of his customized Levi’s jeans, Nulman himself had a time-bombing moment. Nulman dialed the number and discovered the brand’s concierge service, which offered him and three guests a “Champagne-fueled, one-hour shopping experience” at Levi’s San Francisco flagship.

Another pow for Nulman was the discovery of his new, favorite, $9 pajamas at Wal-Mart that have supplanted his Paul Smith pajamas as his top pair. Stranded without lost luggage for two days during a recent ski trip in Idaho, he outfitted himself and his sons for just $279 at Wal-Mart. “Did you know you can get Levi’s for $25 at Wal-Mart?” said Nulman, who nonetheless was wearing a Dubuc-designed, Sgt. Pepper-esque navy jacket as a shirt and still prefers his denimwear premium and custom.