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why are some retailers doing so horribly?


PatientCheetah
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I understand the bifurcated recovery idea - recovery is primarily concentrated in high paying jobs/people with large amount of assets; high ends are doing extremely well and the low/mid ends are not seeing much recovery. I think this has been the case for the last several years. What exactly had changed that made the second half of 2013 so terrible for the low/mid end retailers? I want to hear everyone's opinion. If the reason is not a long term trend, there are many opportunities.

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It's a bit of a mystery to me. One of my best performing holdings is a fashion retailer that sells sporty fashion clothes and has been doing unbelievably well, LfL sales are increasing at 5-6% a year and its not even a niche, its a pretty big chain store with the same online competition as everyone else.

 

I'd like to say the difference is superb management but they also own some non-sports fashion stores that are down in LfL sales and losing money so it isn't the case.

 

The more experience I get investing, the more I think there is a lot of luck in retailing basically!

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It's a bit of a mystery to me. One of my best performing holdings is a fashion retailer that sells sporty fashion clothes and has been doing unbelievably well, LfL sales are increasing at 5-6% a year and its not even a niche, its a pretty big chain store with the same online competition as everyone else.

 

I'd like to say the difference is superb management but they also own some non-sports fashion stores that are down in LfL sales and losing money so it isn't the case.

 

The more experience I get investing, the more I think there is a lot of luck in retailing basically!

 

I guess when most of the customers are women, well, they are fickle. The right playbook for retailers should be watching beaten down names to show signs of stabilization, get in when positive trends are becoming evident, let momentum tells you when to get out - not exactly value investing.

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