3 Specialty Retailers in New Uptrends (ANF, KORS)

By Alan Farley
These retailers have risen to the top of the heap, assuming leadership roles in a challenging environment.

Let’s look at three top-performing specialty retailers that should add to recent gains in coming months. It’s best to focus on the strongest plays when buying this group, given volatile crosswinds impacting industry sentiment and sales growth. Many of these storefronts have failed in their efforts to expand brick and mortar operations into e-commerce and digital sales, giving up market share to more tech-savvy rivals. Those declines are likely to accelerate in coming years, given the millennial generation’s adaptation to all things Internet.

However, these adults and their adolescent siblings have fickle tastes as well, supporting one clothing and accessory style for years and then abandoning it for another style. Fortunately, the sector’s leadership reflects these transitions as well, allowing market players to identify the most profitable opportunities without understanding the aesthetics of modern fashion trends.

Abercrombie & Fitch Co. (ANF) entered a steep downtrend in 2011 after failing to break out above the 2007 all-time high in the lower 80s. The decline unfolded in multiple trend waves over a four-year period, dropping the stock to a six-year low at 16.36 in August 2015. A strong bounce off that level has gained momentum in the last few months, lifting price above the 50- and 200-day EMAs in a new uptrend.


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Category: ANF, KORS, PLCE

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