RECENT NEWS
Forbes  Sep 11  Comment 
In trading on Thursday, music & electronics stores shares were relative leaders, up on the day by about 3.4%.  Leading the group were shares of Radioshack (RSH), up about 19.2% and shares of Conns (CONN) up about 1.4% on the day.
Benzinga  Sep 4  Comment 
Below are the top apparel stores stocks on the NYSE in terms of dividend yield. American Eagle Outfitters (NYSE: AEO) has a dividend yield of 4.80%. American Eagle's shares closed at $14.14 on Wednesday. The Cato (NYSE: CATO) has a dividend...
Forbes  Aug 28  Comment 
In trading on Thursday, apparel stores shares were relative laggards, down on the day by about 1.6%.  Helping drag down the group were shares of Gordmans Stores (GMAN), off about 10.6% and shares of Guess (GES) off about 8.8% on the day.
Benzinga  Aug 27  Comment 
Below are the top mid-cap apparel stores stocks on the NYSE and the NASDAQ in terms of earnings per share. The trailing-twelve-month earnings per share at Genesco (NYSE: GCO) is $3.92. Genesco's revenue for the same period is $2.66...
Forbes  Aug 26  Comment 
In trading on Tuesday, apparel stores shares were relative leaders, up on the day by about 1.6%.  Leading the group were shares of DSW (DSW), up about 9.6% and shares of Wet Seal (WTSL) up about 6.4% on the day.
Forbes  Aug 20  Comment 
In trading on Wednesday, apparel stores shares were relative leaders, up on the day by about 1.1%.  Leading the group were shares of Gordmans Stores (GMAN), up about 12.5% and shares of American Eagle Outfitters (AEO) up about 10% on the day.
Benzinga  Aug 18  Comment 
Below are the top apparel stores stocks on the NASDAQ in terms of PEG ratio. Francesca's Holdings (NASDAQ: FRAN) has a PEG ratio of 0.91. Francesca's trailing-twelve-month EPS is $0.98. Destination Maternity (NASDAQ: DEST) has a PEG ratio of...
Forbes  Aug 13  Comment 
In trading on Wednesday, apparel stores shares were relative laggards, down on the day by about 1.1%.  Helping drag down the group were shares of Aeropostale (ARO), off about 6.8% and shares of Guess (GES) off about 3.7% on the day.
Forbes  Jul 21  Comment 
In trading on Monday, apparel stores shares were relative laggards, down on the day by about 1.3%.  Helping drag down the group were shares of Citi Trends (CTRN), off about 6.2% and shares of Children's Place (PLCE) down about 2.8% on the day.
Benzinga  Jul 17  Comment 
Below are the top mid-cap apparel stores stocks on the NYSE and the NASDAQ in terms of earnings per share. The trailing-twelve-month earnings per share at The Buckle (NYSE: BKE) is $3.39. Buckle's ROE for the same period is 44.40%. The...




 
TOP CONTRIBUTORS

Apparel stores sell clothing, footwear and accessories to consumers. It is a subset of the retail industry, and these companies usually make and sell their own clothing brands (although some do sell third party merchandise). Most apparel stores are considered specialty apparel retailers, because they focus on providing an assortment of similarly themed merchandise to one particular type of customer - for example, Abercrombie & Fitch specializes in "preppy" and traditionally-fashioned apparel for teenagers and college-age consumers. However, some of these companies appeal to a broader customer group, such as Gap (one of the largest apparel retailers with over $15.8 billion in 2007 sales) which has three store chains targeting different demographics: The Gap, Banana Republic and Old Navy.[1]

Companies Involved in Apparel Stores

Women's and Junior's Apparel

  • AnnTaylor Stores (ANN): AnnTaylor sells women's casual clothing through AnnTaylor and AnnTaylor Loft and Factory stores, receiving $2.4 billion of sales in 2007.[2]
  • Chico's FAS (CHS): Chico's targets women from high-income classes with fashionable apparel. Chico's FAS received over $1.7 billion in sales in 2007.[3]
  • Talbots (TLB): Talbots sells women's apparel, footwear and accessories through stores in the U.S., Canada and the United Kingdom. Talbots sales topped $2.2 billion in 2007.[4]
  • Dress Barn (DBRN): Dress Barn's stores offer apparel for women and juniors, with sales of over $1.4 billion in 2007.[5]
  • Wet Seal (WTSLA): Wet Seal sells fashionable apparel and accessories to women and juniors, receiving over $611 million in sales in 2007.[6]
  • Victoria's Secret: The world's largest intimate apparel retailer, Victoria's Secret is owned by Limited Brands (LTD) and received over $5.1 billion in sales revenue between its stores and e-commerce operations in 2007.[7]

Men's Apparel

  • Gap (GPS): Gap Inc. sells apparel and accessories for men, women and children through its three brands: The Gap, Old Navy, and Banana Republic. Gap Inc. is the largest specialty apparel retailer in the U.S. with sales topping $15.8 billion in 2007.[8]
  • Jos. A. Bank Clothiers (JOSB): Jos. A. Bank Clothiers sells tailored and casual clothing for men, receiving over $604 million in sales in 2007.[9]
  • Casual Male Retail Group (CMRG): Through Casual Male XL and Rochester Big & Tall, CMRG provides apparel big & tall men, receiving over $464 million in sales in 2007.[10]

Children's Apparel

  • Tween Brands (TWB): Through two retail chains, The Limited Too and Justice, Tween Brands sells apparel and accessories to girls, receiving over $1.0 billion in sales in 2007.[11]
  • Children's Place Retail Stores (PLCE): The Children's Place sells apparel and accessories for infants, toddlers and young children, receiving over $2.1 billion in sales in 2007.[12]
  • Gymboree (GYMB): Gymboree specializes in children's apparel and accessories, receiving over $921 million in sales in 2007.[13]

Apparel for Teenagers and Young Adults

Extreme Sports and Alternative Lifestyle Themed Apparel

  • Pacific Sunwear of California (PSUN): This retailer specializes in surf-and-skate themed merchandise and received over $1.4 billion in sales in 2007.[20]
  • Zumiez (ZUMZ): Very similar to Pacific Sunwear, Zumiez focuses on providing teenaged customers with skate, surf, and snowboard themed apparel. Zumiez's sales topped $381 million in 2007.[21]
  • Hot Topic (HOTT): Hot Topic sells a variety of apparel and accessories related to alternative music (as well as CD's and vinyl records). The retailer's net sales topped $728 million in 2007.[22]

Athletic Apparel

  • Dick's Sporting Goods (DKS): Dick's Sporting Goods is foremost a sporting goods retailer but apparel sales represented 28% (~$1.1 billion) of Dick's $3.8 billion of revenue in 2007.[23][24]
  • Lululemon (LULU): Lululemon specializes in selling yoga- and activewear for exercise, running and other activities. Lululemon's sales topped $274 million in 2007. [25]
  • Foot Locker (FL): Although Foot Locker is primarily a shoe retailer it sells a wide range of athletic apparel and activewear. Foot Locker received over $5.43 billion of sales in 2007.[26]
  • Finish Line (FINL): Similar to Foot Locker, Finish Line is first and foremost a footwear retailer but also sells athletic apparel and activewear, receiving over $1.3 billion in total sales in 2007.[27]

Apparel Trends and Forces

The Importance of Same Store Sales

Same store sales (also called comparable store sales or "comps") is a measure of sales at stores that have been open for a specific period of time (usually at least one year). Same store sales growth is a more accurate reflection of a company's performance than net sales growth because in order to grow sales in existing stores a company must drive foot traffic and brand loyalty, whereas growing net sales by adding new stores is a poor reflection of company performance as most new stores typically garner heightened attention and foot traffic because consumers like to explore new stores when they open. Also the metric is important from the company's perspective, as it is more profitable to increase sales at existing stores than to incur the expenses necessary to open a new store. As such, companies and analysts pay close attention to the same store sales growth metric.

Gap's falling same store sales since 2004 have dragged down the retailer's net sales from its 2004 peak of $16.2 billion down to $15.7 billion in 2007.
Gap's falling same store sales since 2004 have dragged down the retailer's net sales from its 2004 peak of $16.2 billion down to $15.7 billion in 2007.[28]
J. Crew's net sales growth from 2004-2006 was fueled by double-digit annual same store sales growth.
J. Crew's net sales growth from 2004-2006 was fueled by double-digit annual same store sales growth.[29]


Prices and Discounting Dictate Profit Margins

Profit margins in the apparel retail market vary widely as a product of price levels and discounting strategies. Usually high-priced apparel retailers benefit from large profit margins that they protect by engaging in discounting on a very limited basis. Lower-priced apparel retailers profit margins are narrower and shrink further when these stores slash their prices even lower in order to clear merchandise.

For example, gross profit margins for apparel store companies reach as high as 67% at Abercrombie & Fitch Company (ANF) where denim jeans are priced at $89.50, and as low as 35% at Aeropostale (ARO) where a similar pair of jeans costs a customer $29.99.[30][31] Similarly, operating margins range from nearly 20% at Abercrombie & Fitch Company (ANF) to 8.3% at Gap (GPS).

The Challenge with Fashion

Fashion trends appear and disappear quickly, particularly for younger customers where fashion and fads move even more rapidly, and being "hip" to key fashion trends is a major challenge for apparel retailers. Missing a single fashion trend, such as a popular theme or item like military-styled clothing or traditional vests, can be very costly for an apparel retailer as customers may go to other stores to find a fashionable item if an apparel retailer missed the trend. On the other hand, investing in the wrong trend can also be very costly for an apparel store as it must markdown the merchandise and cut its profit margins to clear the product, which may not be a viable option for some stores that avoid marking down its merchandise.

Brand Positioning: Luxury vs. Near Luxury vs. Standard

A major factor in an apparel store's performance is its brand positioning. Luxury apparel stores typically target customers in the highest income bracket who can afford to pay the highest prices for premium-quality merchandise. Apparel retailers of "near luxury" or "aspirational" brands target customers from the middle- and upper-middle class who desire to wear the latest fashions, but can not afford to pay premium, luxury prices so they settle for these "near luxury" apparel brands such as Abercrombie & Fitch and Polo Ralph Lauren. Finally, standard-level apparel stores such as The Gap target middle- and lower-class customers with average incomes who purchase lower-priced merchandise and look for clearance sales.

An apparel store's brand positioning is very important during times of economic downturns and slowdowns. During these periods, middle- and lower-class consumers cut back their spending on non-necessity items such as apparel. Subsequently sales at standard and "near luxury" apparel stores can suffer in these times as their customers trade down to lower-priced apparel from department stores and discounters such as TJX Companies (TJX) and Wal-Mart Stores (WMT). Simultaneously, luxury retailers avoid this problem because their wealth-laden customers can afford to maintain their spending habits as their high net worths are less effected by economic downturns.

This effect has been relevant in 2008 as the U.S. economy has struggled, growing at a mere 1% annual rate in Q1 FY08.[32] Subsequently, many "near luxury" and standard-brand apparel retailers have suffered: same store sales at "near luxury" retailer Abercrombie & Fitch Company (ANF) and standard-brand The Gap fell 3% and 7% in the first quarter, respectively.[33][34].

References

  1. Gap (GPS) Annual Report 2007, "Results of Operations", p. 18
  2. AnnTaylor Stores (ANN) FY2007 10-K, 03/20/08, Item 6: Selected FiData, pg. 14
  3. Chico's FAS (CHS) Annual Report, Selected Financial Data, pg. 43
  4. Talbots (TLB) Annual Report 2007, Financial Highlights, pg. 3
  5. Dress Barn (DBRN), 2007 10-K, Item 6, Pg. 14
  6. Wet Seal (WTSLA) 10-K 2007, Selected Financial Data, pg. 24
  7. Limited Brands (LTD) Annual Report 2007
  8. Gap (GPS) Annual Report 2007, "Results of Operations", p. 18</ref
    • Men's Wearhouse (MW): Men's Wearhouse offers tailored suiting and clothing for men as well as tuxedo sales and rentals since its acquisition of After Hours Formalwear. In 2007 sales at Men's Wearhouse topped $2.1 billion.<ref>[http://library.corporate-ir.net/library/10/109/109554/items/295568/MW_AR07.pdf| Men's Wearhouse (MW) Annual Report 2007, Selected Financial Data, pg. 38]</li>
    <li id="_note-8">[[#_ref-8|↑]] [http://media.corporate-ir.net/media_files/irol/11/113815/JOSB_2007_Form_10K.pdf| Jos. A. Bank Clothiers (JOSB) 10-K 2007, Selected Financial Data, pg. 21]</li> <li id="_note-9">[[#_ref-9|↑]] [http://library.corporate-ir.net/library/10/104/104952/items/296791/CMRG08AR.pdf| Casual Male Retail Group (CMRG) Annual Report 2008, Selected Financial Data, pg. 29]</li> <li id="_note-10">[[#_ref-10|↑]] [http://media.corporate-ir.net/media_files/irol/61/61045/reports/Tween%20Annual%20Report.pdf| Tween Brands (TWB) Annual Report 2007]</li> <li id="_note-11">[[#_ref-11|↑]] [http://ccbn.10kwizard.com/xml/download.php?repo=tenk&amp;ipage=5580068&amp;format=PDF| Children's Place Retail Stores (PLCE) 10-K 2007, 04/02/08, page 28]</li> <li id="_note-12">[[#_ref-12|↑]] [http://ir.gymboree.com/EdgarDetail.cfm?CIK=786110&amp;FID=1193125-08-68756&amp;SID=08-00| Gymboree (GYMB) 10-K 2007, pg. 18]</li> <li id="_note-13">[[#_ref-13|↑]] [http://www.abercrombie.com/anf/lifestyles/html/investorrelations.html| Abercrombie & Fitch (ANF) Press Release, "Fourth Quarter Earnings Release"]</li> <li id="_note-14">[[#_ref-14|↑]] [http://phx.corporate-ir.net/phoenix.zhtml?c=81256&p=irol-newsArticle&ID=1117814&highlight=| American Eagle Outfitters (AEO) Press Release Report, Fourth Quarter Earnings Release]</li> <li id="_note-15">[[#_ref-15|↑]] [http://phx.corporate-ir.net/phoenix.zhtml?c=131103&p=irol-newsArticle&ID=1118602&highlight=| Aeropostale (ARO) Press Release, Fourth Quarter Earnings Release]</li> <li id="_note-16">[[#_ref-16|↑]] [http://www.urbanoutfittersinc.com/annualreview/index.html| Urban Outfitters (URBN) Annual Review 2007]</li> <li id="_note-17">[[#_ref-17|↑]] [http://www.jcrew.com/content/investorrelations/filings.jhtml| J. Crew Group (JCG) 10-K 2007]</li> <li id="_note-Q4FY08">[[#_ref-Q4FY08_0|↑]] [http://www.buckle.com/corporate/corporate.jsp?CONTENT%3C%3Ecnt_id=10134198673991510&FOLDER%3C%3Efolder_id=9852723696502374&bmUID=1218040808591&assortId=1408474395181084&contentId=10134198674068262| Buckle (BKE) Press Release, Fourth Quarter and Fiscal Year 2007 Results]</li> <li id="_note-18">[[#_ref-18|↑]] [http://phx.corporate-ir.net/phoenix.zhtml?c=83185&p=irol-newsArticle&ID=1118610&highlight=| Pacific Sunwear of California (PSUN) Press Release, Fourth Quarter Earnings Release]</li> <li id="_note-19">[[#_ref-19|↑]] [http://ccbn.10kwizard.com/xml/download.php?repo=tenk&amp;ipage=5557253&amp;format=PDF| Zumiez (ZUMZ) 10-K 2007, Item 6: Selected Financial Information, pg. 23]</li> <li id="_note-20">[[#_ref-20|↑]] [http://ccbn.10kwizard.com/xml/download.php?repo=tenk&amp;ipage=5576653&amp;format=PDF| Hot Topic (HOTT) FY2007 10-K, 04/01/08, Item 6: Selected Financial Data, pg. 27]</li> <li id="_note-21">[[#_ref-21|↑]] [http://media.corporate-ir.net/media_files/irol/13/132215/DSG10k.pdf| Dick's Sporting Goods (DKS) 10-K 2007, Selected Financial Data, pg. 29]</li> <li id="_note-22">[[#_ref-22|↑]] [http://media.corporate-ir.net/media_files/irol/13/132215/DSG10k.pdf| Dick's Sporting Goods (DKS) 10-K 2007, Merchandising, pg. 11]</li> <li id="_note-23">[[#_ref-23|↑]] [http://investor.lululemon.com/secfiling.cfm?filingID=909567-08-415| Lululemon Athletica (LULU) 10-K 2007, Selected Consolidated Financial Data, pg. 27]</li> <li id="_note-24">[[#_ref-24|↑]] [http://www.footlocker-inc.com/PressReleases/2008/pr_2008_4thQ_earnings.html| Foot Locker (FL) Press Release, Fourth Quarter Earnings 2007]</li> <li id="_note-25">[[#_ref-25|↑]] [http://www.sec.gov/Archives/edgar/data/886137/000119312507102461/d10k.htm| Finish Line (FL) 10-K 2007, Selected Financial Data, Pg. 16]</li> <li id="_note-26">[[#_ref-26|↑]] [http://gapinc.com/public/documents/GPS_AR_07.pdf| Gap Inc. (GPS) Annual Report 2007, Selected Financial Data, pg. 16]</li> <li id="_note-27">[[#_ref-27|↑]] [http://ccbn.10kwizard.com/cgi/convert/pdf/JCREWGROUPINC10K.pdf?pdf=1&repo=tenk&ipage=5560175&num=-2&pdf=1&xml=1&cik=1051251&odef=8&rid=12&quest=1&dn=2&dn=3| J. Crew Group (JCG) 10-K 2007, Results of Operations, pg. 33]</li> <li id="_note-28">[[#_ref-28|↑]] [http://www.abercrombie.com/anf/lifestyles/html/investorrelations.html| Abercrombie & Fitch (ANF) Press Release, "Fourth Quarter Earnings Release"]</li> <li id="_note-29">[[#_ref-29|↑]] [http://phx.corporate-ir.net/phoenix.zhtml?c=131103&p=irol-newsArticle&ID=1118602&highlight=| Aeropostale (ARO) Press Release, Fourth Quarter Earnings Release]</li> <li id="_note-30">[[#_ref-30|↑]] [http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm|Bureau of Economic Analysis, National Economic Accounts, Gross Domestic Product]</li> <li id="_note-31">[[#_ref-31|↑]] [http://www.abercrombie.com/anf/lifestyles/html/investorrelations.html|Abercrombie & Fitch (ANF) Press Release, First Quarter Results 2008]</li> <li id="_note-32">[[#_ref-32|↑]] [http://gapinc.com/public/documents/PR_Q108Earnings052208.pdf|Gap (GPS) Press Release, First Quarter Earnings 2008]</li></ol></ref>
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