Podcasts · The Canadian Investor
Why Investing Fashion Stocks Is So Hard: 3 Failures & 3 Comebacks
· 54 min · Episode 646
Episode Why Investing Fashion Stocks Is So Hard: 3 Failures & 3 Comebacks
Lululemon was once one of the strongest brands in retail. Now comparable sales are falling, guidance has been cut repeatedly, and investors are asking whether the company can regain its footing—or whether its best days are behind it.
In this episode of The Canadian Investor Podcast, Simon and Dan dig into why fashion companies can be some of the most difficult businesses to own for the long term. Consumer tastes can change quickly, switching costs are virtually nonexistent, aggressive expansion can backfire, and excessive discounting can train customers to stop paying full price.
They look back at Express, Quiksilver and Aeropostale, three once-popular brands whose public shareholders were eventually wiped out, and contrast them with some remarkable comeback stories. Abercrombie & Fitch reinvented its brand, Victoria’s Secret changed course, and Crocs nearly went under before doubling down on the product that made it famous.
Finally, Simon and Dan discuss what these examples could teach investors about Lululemon, whether its turnaround could take years, and why waiting for evidence of a recovery may make more sense than trying to perfectly time the bottom.
Stocks discussed: LULU, ATZ.TO, GOOS, GRGD.TO, GAP, NKE, ANF, VSXY, CROX, ADS.DE.
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