Retailers Remain Strong Despite Threats of Affordable Reseller Offers

- www.rothmanresearch.com

Retailing by definition is the sales of goods and services in small or medium quantities directly to consumers. By this, it goes without saying that department stores, specialty stores, discount stores and even seasonal retailers fall under the same category that is retailing. Over a span of 20 years, the general retailing business has seen a number of metamorphoses which have brought it closer to its consumers in every aspect. What had been more of a tailor-made market a few years back in the apparel industry has revolutionized into a pret-a-porter market. "The demand was sweepingly too overwhelming for the industry to look away. Remember the time where one would order from a catalog and wait for it to be custom-made and shipped to him... well nowadays there are factory shops virtually 10 to 30 minutes drive from your home, you can choose from a wide array of designs and indulge in a buying spree from their showroom whilst in the backroom new pieces are being put together or tailor-made," www.rothmanresearch.com analyst Jack Benassi commented, "I tend to look at the general retailing industry as the 'fast-food' phenomena of the services sector."

www.rothmanresearch.com researched two key players in the apparel stores industry, conspicuously Hot Topic Inc. (NASDAQ: HOTT) and Abercrombie & Fitch Co. (NYSE: ANF).

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"As the retailing industry continues to mold itself according to overpowering demand from end-users, we have seen a sharp decline in the number of independent retailers. The trend today is chain stores, and they have the upper hand over independent retailers through their vertical structures and centralized buying," says Jack Benassi, analyst of www.rothmanresearch.com

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Abercrombie & Fitch Co. operates as a specialty retailer of casual sportswear apparel for men, women, and kids, which targets teens and are usually found in the department stores. The company reported a 5% rise in sales last Monday, versus the estimate of a decline of 7%. Stock is surging pre-market. Abercrombie and Fitch has really turned things around and if consumer spending continues to improve it will be one of the biggest beneficiaries.

Hot Topic, Inc. operates as a mall- and Web-based specialty retailer in the United States. It operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Like Abercrombie & Fitch Co., the retailer also mainly targets teens. Comp sales increased 8.5% in the Torrid segment for the four-week period ended Feb 27, 2010, compared to 2009. The company's Torrid stores sell apparel, lingerie, shoes, and accessories for plus-size women.

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