Article Excerpt:
TWST: To start, perhaps you could give us an idea of your coverage.Mr. Black: The coverage list is primarily retail softlines ' GAP (GPS), Children's Place (PLCE), Abercrombie & Fitch (ANF), American Eagle (AEOS), Urban Outfitters (URBN), Ross Stores (ROST), TJX (TJX), Limited (LTD), AnnTaylor (ANN), ' and DSW (DSW).
TWST: How was 2005 for these retailers? Was there any common theme?
Mr. Black: Yes. I think the common theme in 2005 would have to be market
share takers and market share donors. One of the places this is most
evident is in the teen market. ANF and AEOS continue to take share from
the market share donors such as Gap and Limited, which are attempting to
rejuvenate the earnings momentum in their apparel divisions. We've also
seen the market share theme play out among the growth retailers. We
would put both Urban Outfitters and Chico's (CHS) in the share taker
category ' each has been able to carve out a unique niche in the space:
URBN, with its differentiated mix of brands, private label and home, and
CHS, with its focus on baby boomers. I think we saw Ross Stores and TJX
in the off-price sector have very difficult years ' for a couple of
different reasons. Ross Stores stumbled as it implemented new
technology, and TJX, which has had its fits and starts growing some of
its younger businesses, fell short on the merchandise front as it veered
away from its 'treasure hunt' roots at the Marmaxx division. Both of the
companies put initiatives in place ' on the technology end for Ross, and
by making a change in the executive suite at TJX. And as 2005 has come
to a close, we've now seen the off-price sector begin to percolate
rather nicely ' especially at Ross, which has posted same-store sales
gains above guidance for the past several months. Again, I think it's
more a function of what's happening internally at those companies,
although it is interesting to note that off-pricers in general have
started to gain back market share. We think this may indicate that some
consumers are indeed trading down as home heating prices bite into
monthly budgets.
Tickers included in this excerpt: AEOS, ANF, ANN, CHS, DSW, GPS, I, LTD, PLCE, ROST, TJX, URBN
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