3 retail shares in my shopping basket

The Australian retail sector may be going through a reasonably tough time due to low wage growth and subdued investor sentiment, but not all retailers are struggling. In fact, some have even continued to thrive.

Three retail shares that I think would be great investments are listed below:

Bapcor Ltd (ASX: BAP)

Bapcor, formerly known as Burson Auto Parts, is one of Australia’s largest suppliers of car parts and accessories. The company has been growing very strongly over the last few years and I believe there’s still plenty more ahead for the company. Especially given its plan to expand into the Asia market. I’m optimistic that this expansion will support its future growth when its Australian operations’ growth inevitably slows down. This year management expects to deliver 30% pro forma net profit after tax growth from continuing operations.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a fast-growing fashion accessories retailer which has been successfully expanding its business internationally. So much so, approximately 53% of its store network is overseas now in markets including the UK, Singapore, and the United States. The latter is the market which I’m most excited about. Although it only has one store in the United States at present, if that store is a success then it could be the start of a significant rollout. I expect management to provide an update on its U.S. expansion later this month.

Super Retail Group Ltd (ASX: SUL)

I think that this retail conglomerate is a great option for both value and income investors. Although the company’s Leisure segment has been a major drag on its performance in the last couple of years, management acquired the popular Macpac brand recently as part of an attempt to turnaround its fortunes. The market has responded incredibly well to this and appears to believe in the plan. If it is a success, which I’m optimistic it will be, then Super Retail could be poised for solid earnings and dividend growth in the coming years. Its shares currently provide a trailing fully franked 5.1% dividend.

These top blue chips are well worth a closer look as well if you ask me.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia owns shares of Super Retail Group Limited. 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.

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