Due to the seismic shift to online shopping and changing consumer preferences, a number of retailers such as Myer Holdings Ltd (ASX: MYR) have struggled in recent years.
This has understandably led to investors becoming hesitant about investing in the sector.
But I think that ignoring the sector completely would be an error, especially with some retailers absolutely thriving in the current market.
Three retailers which I think are positioned for strong long-term growth are listed below:
Lovisa Holdings Ltd (ASX: LOV)
I think that this fast-fashion jewellery retailer is arguably the best option in the retail sector right now. Thanks to its international expansion and strong like-for-lie sales growth, the company recently reported half-year revenue of $118.6 million and net profit after tax of $24.8 million. This was an 18.9% and 22.5% increase, respectively, on the prior corresponding period. While I think Lovisa still has a long runway for growth in Europe, the main attraction in my opinion is its U.S. expansion. If it can succeed in the United States, I think its store network could double over the next decade.
Noni B Limited (ASX: NBL)
This mature women's fashion retailer was another highlight in the sector during earnings season. During the half Noni B achieved a 35.1% increase in first-half revenue to $193.2 million and a 379.5% lift in first-half profit to $11.8 million. I think the niche market the company operates in is a lucrative and growing one and, importantly, less likely to be disrupted by online retailers such as Amazon.
Premier Investments Limited (ASX: PMV)
Premier Investments' is the retail conglomerate behind the increasingly popular Smiggle and Peter Alexander brands, amongst others. I have been thoroughly impressed with the growth of the Smiggle and Peter Alexander brands in recent years and expect more of the same over the next few years. As these two brands make up the majority of the company's revenue now, I feel confident that Premier Investments' is capable of achieving above-average earnings growth over the next two to three years at least.
