It has so far been a terrible year for department store stalwart Myer Holdings Ltd (ASX: MYR), but while the household name retailer has flailed, these three shares have soared – defying the odds in the volatile discretionary retail space.
Premier Investments Limited (ASX: PMV)
Any parent who has ever purchased a $45 pencil case for their child from Premier Investments Limited’s flagship Smiggle store will have some insight into how this specialty retail chain has managed to dominate in a sector prone to violent ups and downs.
April’s ABS statistics showed retail sales have been climbing – up 0.4% month-to-month – with such figures even seeing previously-struggling Domino’s Pizza Enterprises Ltd (ASX: DMP) book gains.
Premier has not only been successful in leveraging on overall market conditions, but its strength is also in its well-loved brands, with its leader Smiggle joined in success by Peter Alexander, while Portmans, Just Jeans and Jacqui E perform reasonably well as sales at women’s fashion label Dotti appear to lag.
While Premier shares reached a 52-week high on June 12 to close off at $16.96 they are sitting down 1.2% to $16.75 at the time of writing, but it still looks like the company has plenty of growth potential to me – particularly with the formidable Solomon Lew at its helm, who lets little go through to the keeper.
Noni B Limited (ASX: NBL)
A research house recently placed a buy rating on women’s apparel and accessories retailer Noni B Limited with a $4.74 price target on the stock, which is down 0.6% to $3.00 today.
The researcher likes Noni’s recent acquisition of five brands from Speciality Fashion Group Ltd. (ASX: SFH) with the take-up expected to improve Noni’s market position with a forecast $892 million turnover in FY19.
Noni B operates in a competitive space, where competitor discounting can make or break sales figures, but I’d be inclined to stage a buy-in sooner rather than later if you’re interested in Noni B’s prospects.
Lovisa Holdings Ltd (ASX: LOV)
Shares in fashion jewellery retailer Lovisa Holdings Ltd are hovering in 52-week high territory at the moment as the global company continues to throw its weight around in a highly competitive niche retail market.
Lovisa’s expansion into Asia, Europe and the US has been going great guns and investors have been rallying behind it as a result.
Lovisa has 320 stores across 15 countries and operates a highly-scalable model which delivers some pretty good returns with profits turning in all territories – proving its market resilience and no doubt convincing shareholders that its potential for growth exists.
Lovisa still relies a lot on pedestrian traffic sales, which could prove a bit of a downside while dominant online players like Kogan.com Ltd (ASX: KGN) seek to assert themselves, but for now, the formula seems to be working, and if the last year is anything to go by, Lovisa has big things in store for the future.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited and Kogan.com ltd. 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 Scott Phillips.