It's fair to say 2022 was a challenging year for ASX 200 retail shares. Rising inflation and interest rates meant shoppers began to tighten their belts.
In such an environment, consumer discretionary shares are often the first to take a hit. Being 'discretionary' in nature, these businesses don't sell essential goods.
So, when households and young hip singles, who are critical to the consumer discretionary market, are forced to slim down their spending, they typically start with discretionary items first.
So it's even more impressive that the top-performing ASX 200 retail share of 2022 is a jewellery retailer.
Lovisa Holdings Limited (ASX: LOV)
The fashion jewellery and accessories retailer recorded an astonishing 15% share price gain in 2022.
To put that into perspective, this was a far superior performance to its ASX 200 retail share peers.
The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) dived about 23% over the 12-month period. The S&P/ASX 200 Index (ASX: XJO) slipped 5.5% as well.
So, Lovisa shares really shimmered and shone by comparison. And here's a clue why.
As my Fool colleague Cathryn reports, Lovisa does things differently to other ASX 200 retail shares.
As part of its vertically-integrated business model, Lovisa designs and manufactures all of its products in-house. Other retailers sell a mix of own-brand and third-party products.
This boosts Lovisa's gross margins, which came in at a whopping 79% in FY22. As Cathryn puts it, "for every pair of $10 earrings flying off the shelves, it paid suppliers on average just $2.10".
Lovisa also has smaller stores, which means lower rents. This contributed to an FY22 EBITDA margin of 31%.
The Lovisa share price is having a great day today, currently $26.30, up 3.3%.
As my Fool colleague James reports, today's bump is likely a response to a broker note out of Canaccord Genuity. According to the note, its analysts have lifted their price target on Lovisa shares by 22% to $27.75.
Bapcor Limited (ASX: BAP)
The second 'best-performing' ASX 200 retail share in 2022 was car parts and accessories retailer Bapcor — but its share price actually lost value. Yep, that's how bad the year 2022 was for retailers.
The Bapcor share price shed 7.85% in value over the 12 months. That's a lot better than the index, but it's doubtful shareholders were comforted by that.
But there's some good news looking ahead.
Broker Citi reckons automotive shares are worth buying despite the obvious economic headwinds in 2023.
Bapcor is Citi's "top pick" among small-cap car shares. This broker likes its "relatively less-discretionary product offering" and potentially "conservative fiscal 2025 consensus earnings".
The Bapcor share price is trading at $6.66 on Friday afternoon, down 1.26%.
JB Hi-Fi Limited (ASX: JBH)
The JB Hi-Fi share price lost 13.2% in value in 2022. But this follows a 99% spike from the stock's trough price during the COVID-19 crash in early 2020 through to the end of 2021.
JB Hi Fi's net profit skyrocketed by 80% between FY20 and FY22 as people sought more home entertainment options during lockdowns, along with technology upgrades to help them work from home.
So, in this context, a 13.2% correction for this ASX 200 retail share appears not to be a big deal.
As Motley Fool Australia's chief investment officer, Scott Phillips points out, the price decline has actually made JB Hi-Fi shares an appealing value buy.
JB Hi-Fi shares are still trading on a very low price-to-earnings (P/E) ratio of 9.67, according to the ASX.
The JB Hi-Fi share price is trading at $45.74 on Friday afternoon, up 0.46%.
The data above is from S&P Global Market Intelligence canvassing ASX 200 retail share price gains from the close on 31 December 2021 to the close on 31 December 2022.
