Why the Shaver Shop Group Ltd share price jumped 5% today

Source; Shaver Shop

In morning trade the Shaver Shop Group Ltd (ASX: SSG) share price was one of the biggest movers on the market with a 5% gain.

Although it has given back some of these gains now, at the time of writing it still sits higher by 2.5% at 67 cents.

What happened?

In a month that has seen countless profit guidance downgrades from retailers such as RCG Corporation Ltd (ASX: RCG), Godfreys Group Ltd (ASX: GFY), and Surfstitch Group Ltd (ASX: SRF), it was a pleasant surprise to see Shaver Shop come out with a positive trading update this morning.

According to the release the improvement in trading conditions that was announced in April has been sustained. As a result management expects the company to hit the high-end of its full-year EBITDA guidance range of between $13.7 million and $15 million.

Like Bellamy’s Australia Ltd (ASX: BAL) and Blackmores Limited (ASX: BKL), Shaver Shop has experienced strong demand for certain products from daigou shoppers who resell them to consumers in China.

Should you invest?

Shaver Shop is one of a number of retailers that I would avoid due to the impending arrival of Amazon on Australian shores, especially with its slender margins.

So although the company is benefiting from daigou shoppers today, things could be very different this time next year.

Instead of investing in Shaver Shop I would suggest you look at these Amazon-proof blue-chip shares which I think have explosive growth potential.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Amazon. Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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