Retail Assumptions

09Apr09

The WSJ provided a broad view of the retail sector this am – which of course key to the overall course of recovery out of this recession.

Retail is one of two sectors (the other being telecom) that while intriguing from a personal perspective, I avoid like the plague from an individual stock perspective. Individual returns are simply too dependent on management effectiveness vs. underlying macro, fiscal, technical, or product influences. After all t-shirts, soaps, jeans, and dial tones are indistinguishable save for a label and price tag. As an armchair analyst I simply don’t have the time and visibility to be sufficiently familiar with each and every management team out there, and unfortunately my consumption preferences and observations of other consumers within the sector has burned me all to often in the past.

Stars
COST Perennial favorite of mine, there is simply no one else in this segment
LTD BBW is expanding into Canada and again their closest competitor is DOA
LVMH Good mix of medium luxe products that just don’t seem to ever reach brand exhaustion

Losers
TGT WMT took aim here and for the most part succeeded. Too bad as I was looking forward to a cdn presence
COH Saturated and now acting as a discount retailer
LULU Because I’m a hater and got caught holding this back in the summer

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