Mr. Sozzi: I cover specialty apparel names, mostly softline, but I also cover hardline companies such as Wal-Mart (WMT), Target (TGT) and Costco (COST).
TWST: How is business in general among the specialty retailers?
Mr. Sozzi: Within specialty apparel, what you are seeing is much need-based
buying. You are seeing customers migrate to stores and really focus on basic
apparel. One good example is Aeropostale (ARO). On one hand, they've had success
in the fashion piece of their business, and consequently that has drivena AUR
and merchandise margins higher. But for the most part, what you're seeing is
strength in basic tops, T-shirts, items along those lines that the consumer can
just pick up cheaply. They are low-hanging fruit so to speak: good price, good
value. But it's still definitely a value-focused market out there. At least
based on what our work suggests.
Tickers included in this excerpt: AEO, ANF, ANN, ARO, BJ, COST, GES, GPS, JCP, KSS, M, PSUN, TOT, URBN, WMT
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