The arrival of Amazon in Australia and the abject performances of Retail Food Group Limited (ASX: RFG) and Myer Holdings Ltd (ASX: MYR) have no doubt put a lot of investors off investing in the retail sector.
But I think investors should look beyond this as there are a number of quality options in the sector right now.
Two that I think are worth a look are listed below:
Baby Bunting Group Ltd (ASX: BBN)
Although this baby products retailer's shares have rallied over 23% in the last month following a sharp drop, I still think its shares are great value at 17x trailing earnings. Furthermore, they provide investors with a trailing fully franked 4.4% dividend.
Its earnings may be expected to be flat this year due to the impact of clearance sales from its competitors, but I believe this is just a short term headwind and the company will be in a position to outperform in FY 2019 as competition lessens and it grabs more market share.
Lovisa Holdings Ltd (ASX: LOV)
This fast-growing jewellery company could be a great buy and hold investment option in my opinion if its international expansion plans are a success. After conquering the Australian and South African markets, the company has opened its first store in the United States.
While it is still early days, I'm very optimistic that the company will make a success of this lucrative opportunity. If it does, it has the potential to provide it with above-average sales growth for the foreseeable future.
