Looking ahead, Chico’s is preparing to turn Boston Proper, the e-commerce business that it acquired in 2011, into a brick-and-mortar business later this year. Boston Proper offers apparel to an age group that includes both the target demographic of Chico’s and White House Black Market, which could help diversify and boost its top line growth.
Coldwater Creek gets left out in the cold
While Ann and Chico’s FAS, Inc. (NYSE:CHS) can be considered relatively safe, conservative investments, its competitor Coldwater Creek Inc. (NASDAQ:CWTR) has fallen off the map. The Sandpoint, Idaho-based company has lost more than 90% of its market value over the past three years, and has been unprofitable since 2008. In other words, Coldwater Creek is another company that was floored by the global financial meltdown and hasn’t yet mustered the strength to get back up. Coldwater Creek Inc. (NASDAQ:CWTR) focuses on less of a defined age group than either Ann Inc (NYSE:ANN) or Chico’s, but its apparel is generally considered more conservative and suited for a 35-54 age range.
Last quarter, Coldwater Creek Inc. (NASDAQ:CWTR) didn’t put up much of a fight. It reported a loss of $0.66 per share, a slight improvement from the loss of $0.80 it reported a year earlier. Revenue slid 8.35% to $155.7 million as same-store sales plunged 10.5%. Worse yet, the company does not see either its same-store sales improving, nor does it believe that it will rise out of the red, forecasting a net loss of $0.55 to $0.75 this quarter.
Although CEO Jill Dean touted some cost-cutting measures the struggling retailer has taken over the past quarter, the company still has no clearly defined plans to improve its performance for the rest of the year. In other words, company could be in serious trouble.
The Foolish Bottom Line
To answer my original thesis, I believe that retailers focusing on older women, like Ann and Chico’s FAS, Inc. (NYSE:CHS), are more stable investments than teen apparel retailers. Ann Inc (NYSE:ANN) and Chico’s both reported flat same-store sales growth last quarter, but when compared to the 14% and 15% declines respectively reported by Aeropostale and Abercrombie & Fitch, they look positively stunning. However, investors should watch out for companies like Coldwater Creek Inc. (NASDAQ:CWTR), which could suffer the same fate as Talbots, which was delisted last year.
The next time you look for retail stocks to invest in, maybe you should check out where your mom or aunt shops instead of what kids consider cool these days. It might just give you a fresh perspective on the retail apparel industry.
The article Will These Apparel Retailers for Mom Outgrow the Teenage Challengers? originally appeared on Fool.com and is written by Leo Sun.
Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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