Click Frenzy readies for blockbuster

The sale event website is back again this month.

a woman

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Sale event website Click Frenzy, which launched last year to great fanfare and ultimately more traffic than it could handle, is back again.

While the inaugural event in November 2012 left a lot to be desired with the site crashing almost immediately, leaving participants less than impressed, founder Mr Grant Arnott says upgrades made to the website and associated infrastructure has him confident that the upcoming April ‘Mother’s Day Frenzy’ can handle millions of visitors.

Myer (ASX: MYR), Target (owned by conglomerate Wesfarmers (ASX: WES)), and scores of small retailers took part in last year’s event. They are charged on a ‘cost per click’ basis. How many shops return for the upcoming event is not public yet, but according to a report published in The Age newspaper, many of last year’s participants are returning, including big-name brands.

On the back of weak prior comparative sales numbers, the cycling of better numbers has helped the share price of retailers soar so far this calendar year. While the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has risen 7% in 2013, David Jones (ASX: DJS) is up 22%, Harvey Norman (ASX: HVN) and Myer are both up around 40%, and JB Hi-Fi (ASX: JBH) a massive 47%.

Foolish takeaway

While retail stocks have seen a rebound in their share prices as earnings multiples have expanded, from this point for share prices to go higher, multiples will either become increasingly stretched or earnings need to follow through. Given significant headwinds faced by retailers from online shopping, a frugal consumer and foreign competitors entering the domestic market, it’s arguable that retailers need events such as Click Frenzy just to help maintain their current level of earnings.

Rather than focusing on retailers, Foolish investors may be better off looking at certain online businesses and advertisers that may stand to gain even more than retailers from a revived consumer.

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