November 5, 2020
Many fashion fanatics are very loyal to the designers they love. However, some might be surprised to learn that publicly traded companies are behind some of their favorite fashion brands and retailers. While the global fashion industry is forecast to contract by 27-30% due to COVID-19, bright spots include the athleisure sector and e-commerce.
If you are interested in putting the same brands in your portfolio that you do in your closet, learn more about the companies below:
The Gap Inc. (Tii:GPS)
Months of quarantine-related closures pushed brick-and-mortar sales way down. However, certain brands within the publicly-traded company are thriving. At the top of that list is their athletic wear company Athlete. Athletes' second-quarter delivered a six percent increase in sales across the brand. As stores reopened, the apparel company also saw a boost as customers gradually returned to in-person shopping. Digital sales fared even better, with a 74% surge. The Gap is working on expanding sales in other areas and partnerships with lifestyle content producer PopSugar Inc. and rapper Kanye West in the works.
Citi Trends Inc. (Tii:CTRN)
Fast fashion and discount brands may not resonate with luxury buyers, but many individuals find them a great way to keep their wardrobes fresh on a budget. Citi Trends is among the brands that have significantly profited from this trend and investors have been noticing. Share prices are 42% higher than they were this time last year. The brand has a wide brick-and-mortar reach, with 587 retail locations throughout the U.S.
Guess', Inc. (Tii:GES)
While there are seemingly dozens of must-have designer denim brands, one of the first to get huge label recognition was Guess. The company staked its high fashion claim by initially only marketing its casual clothing in high-end retailers. When the brand's owners decided to expand reach to broader markets in the 90s, a public offering soon followed. Despite revenue that decreased 42% in their most recent quarter, Guess has managed to keep losses at a low $0.01 per share by controlling costs and inventory. Long-term investors were happy to learn that the company has also reinstated its quarterly cash dividend. The $0.1125 per share adds up to a 3.3% yield.
Urban Outfitters Inc. (Tii:URBN)
This hip clothing and decor retailer has five separate e-commerce and brick-and mortar-stores under its umbrella. While net sales in the company were down when second-quarter earnings were released in September, representatives stated that all the company's brands were profitable. One bright spot involved digital sales at Free People, its bohemian apparel and lifestyle retail business. While sales in the brick-and-mortar locations were down, e-commerce transactions saw substantial growth in new customers.
Lululemon Athletica (Tii:LULU)
More at home in yoga pants? Lululemon is a label that many swear by for comfort and style. The athleisure brand is well on its way to a valuation that exceeds $50 billion, with recent expansions into areas that include menswear sales, personal care products and an e-commerce expansion. While many clothing stores are closing brick-and-mortar locations in the face of pandemic-related sales slumps, Lululemon is among the few that are expanding. The brand intends to add between 30 and 35 stores within the next year. The company is also making a significant investment in community-centric offerings that include outdoor workouts and group yoga classes.
These are just a few of the fashion brands that can show up in your portfolio, along with your latest capsule wardrobe. There are many more that fans can own, so it's always worth researching who owns your favorite labels and whether individual investors can get a piece of the pie.
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