BKE has no economic moat to protect it once its concept fades. Furthermore, its unit expansion growth is well behind its revenue growth, which has some growth investors wondering what the next leg of the story will be. Moreover, unlike competitors Gap (GPS) and Abercrombie & Fitch Company (ANF), the company relies heavily on brand-name clothing, which accounts for about two-thirds of sales (the rest comes from private labels), which would put it in the mercy of the brands, but mitigate the fickleness of the fashion industry.
