Although there are a lot of retail shares such as Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings Ltd (ASX: MYR) that I would avoid right now, I believe there are still some great investment options in the industry.
Three retail shares which I think could be in the buy zone today are as follows:
Noni B Limited (ASX: NBL)
Through its eponymous Noni B brand, W Lane, Table 8, and BeMe, this retail company serves the middle-aged women's fashion market. I believe this is a great niche to operate in at present due to Australia's ageing population and the fact that its target demographic is arguably less likely than others to shop online. The retailer has had a strong start to FY 2018 and looks likely to build on FY 2017's impressive result. At just 16x trailing earnings I think Noni B is worth considering.
Premier Investments Limited (ASX: PMV)
Although I'm not a big fan of its struggling core brands, the fast-growing and high margin Peter Alexander and Smiggle brands have been able to offset the weakness. These two niche brands now account for 40% of total company sales and this is likely to grow to an even greater portion in the future. Management expects Smiggle's sales alone to exceed $400 million by FY 2020 thanks to its global expansion, representing growth of 67% on FY 2017. Similarly, Peter Alexander's sales are forecast to grow to over $250 million during the same period. This will be an increase of almost 31% on FY 2017's sales.
Super Retail Group Ltd (ASX: SUL)
Super Retail is the company behind brands such as Supercheap Auto and Rebel Sport. While the arrival of Amazon in Australia will be a challenge for the company, I believe management has worked hard to prepare for this eventuality and is well placed to compete and build on its strong start to FY 2018. So with its shares trading at 11x trailing earnings and providing a trailing 6.1% yield, I think it could be a good option in the industry.
