$SKS – downgraded the from OW to N; JPM-concerned today that luxury spending could hit a soft patch over the coming months

SKS – downgraded the stock from OW to N; we are incrementally concerned today that luxury spending could hit a soft patch over the coming months – keeping shares of SKS under some duress. Separately, recent market speculation of a private equity takeout has boosted the stock price significantly this week (up 20% yesterday/SPX flat), and we feel it’s prudent to use the bump as an exit point; re an LBO, while the math works at $11/shr, we think $8-9 seems more reasonable

• GES’s CEO Marciano said that BTS sales are ‘a little bit soft.” Bloomberg · SKS – Carlos Slim last night said he isn’t aware of a takeover offer and wouldn’t accept an $11/share bid. Bloomberg
• SKS – NY Post report says that while the co has held numerous talks w/potential acquirers this year, an LBO isn’t imminent.
• SKS – A. Sorkin on CNBC Wed morning says that no one else seems to be able to confirm the Daily Mail story.

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