McDonald's Corporation (MCD, Financial) has decided to treat its customers with something out of the box- and that includes its Big Mac collection of pajamas, rain gear, thermal sets, pet clothing at what not! The Illinois-based fast food chain revealed its collection at the McWalk Fashion show which was based in Sweden. Jessie J, the English singer and songwriter, was a part of the celebrity guest list. All the clothing collection have the iconic burger imprinted on them. Burger lovers are all grabs for this new idea! Yes, we shall call this McStyling! The unveiling of the fashion line comes close to Burger King Worldwide Inc.'s (BKW, Financial) announcement of its plans to make a new perfume that smells like a Whopper.
Fashion collection
Until recently, McDonald's was embroiled in a communism-based controversy wherein Taco Bell (YUM, Financial) labeled its competitor as a "disgusting communist pig." But it seems that McDonald's has shifted its focus on diversifying rather than retaliating. Obviously, burger lovers will grab the opportunity to wear these lifestyle clothing! No doubt! Though these clothes do not have the McDonald's logo, they bear images of burgers all over the cloth. The collection ranges from pants to bedsheets, to pillows to doggie coats. The 'McClothes' are priced sensibly, with the thermals costing 40 British Pound Sterling while the wallpaper is priced at £38. The bedsheets which provide you the opportunity to get sweet McDreams are priced at £38. Though many McDonald's patrons believe that this is an April Fool's day prank, some believe that the Big Mac collection will "beef up" their look. These Big Mac Clothes are only available in Sweden as of now, though the company may expand its availability later. Most of the clothing is apparently inspired by the collection of Jeremy Scott –Â The Golden Arches.
The clothing line is launched in celebration of the fast food's "I'm Lovin' It" campaign. This campaign includes 24 hours of surprises in 24 different cities. Other campaigns included a huge coffee-cup-shaped pit ball at Sydney. The fast food giant also held a free Ne-Yo concert in LA. A few other campaigns include the Joy Maze at Bucharest, a huge Big Mac Jigsaw puzzle at Madrid among many others.
Investor Take
Though shareholders may believe that the extra profits generated will increase their EPS, that's not the case. All the profits generated through the sale of the clothing line will be sent to the Ronald McDonald House Charities. However, investors may have a reason to worry due to the company's latest issue of poor hazardous equipment. Workers complained of receiving high degree burns due to lack of safety equipments along with pressure from higher authorities to increase efficiency. For the fourth quarter 2014, global comparable sales reduced 0.9% while consolidated revenues reduced 7%. Even the diluted EPS of $1.13 reduced 19%. For the full year 2014, diluted EPS of $4.82 decreased 13%, while consolidated revenues reduced 2%. Given this financial performance of McDonald's, shareholders may obviously fret about the performance of their shares. Hopefully, McDonald's campaigns may bring about a change and turn things in the favor of the company. McDonald's CFO Pete Bensen said that for 2015, the company is exercising further financial discipline. They will start the year with a low capital expenditure budget of $2.0 billion. This will help the company to regain their business momentum, which in turn will improve sales and profitability. Let's hope for the best.
