Yesterday the Australian Bureau of Statistics released its retail data for the month of December which revealed a disappointing seasonally adjusted 0.1% drop to $25.6 billion.
Household goods retailing was the main cause of the drop, with a seasonally adjusted 2.3% drop in sales. It is worth noting that this is largely believed to be the result of the decision by Woolworths Limited (ASX: WOW) to shut the doors on its Masters brand and not necessarily a slowdown in the industry.
One area of retail that performed strongly during the month was clothing, footwear, and personal accessory retailing. This area of retail posted a seasonally adjusted increase of 1.4%.
I believe this could be a sign that these two retailers have continued to perform strongly and could be worthy of an investment today:
Premier Investments Limited (ASX: PMV)
Whilst Premier Investments is the company behind a number of brands such as Just Jeans, Dotti, and Portmans, the main attraction to the company in my opinion is its Peter Alexander and Smiggle brands. These two brands in particular have been the engine driving its growth over the last few years. This looks set to continue for the foreseeable future thanks largely to Smiggle's international expansion. At just under 17x estimated FY 2017's earnings according to CommSec, I think Premier Investments is a great option for investors today.
RCG Corporation Ltd (ASX: RCG)
RCG is the owner and operator of footwear retailers including Athlete's Foot, Platypus Shoes, and Hype. The company also has Australian wholesale arrangements for popular global brands such as Vans, Skechers, and Timberland. In the last six months its shares have fallen by almost a third. Because of this drop they are now changing hands at just 15x estimated FY 2017's earnings, which I believe makes it an opportune time to snap them up. Especially with its fully franked trailing 4.3% dividend.
