Back To School Stock Picks Are A Mixed Bag; September Will Be Most Important Sales Month For Women

• On 12:11 pm EDT, Tuesday September 8, 2009

67 WALL STREET, New York - September 8, 2009 - The Wall Street Transcript has just published its Specialty Retail Report offering a timely review of the sector to serious investors and industry executives. This 57 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Consumer Electronics -- Innovation -- Appliance Category -- Housing Market -- Video Games -- Growth of Amazon -- International Growth -- Positives of the Downturn -- Cross-Shopping -- Buying Trends -- Competition in Specialty Retailing -- Department Stores -- Balance in Merchandise -- Underselling -- Promotions -- Informed Customers -- Internet Stores -- Change in the Consumer -- Top-Line Expansion -- Lower Cost Structure -- Teen Consumers -- Back to School -- Stablization -- Consumer Spending Trends -- Shifts in Consumer Shopping Habits -- Comparable Store Sales -- Holiday Expectations -- Retailers Reaction to Shifts in the Economy -- Value

Companies include: Amazon (AMZN); Best Buy (BBY); hhgregg (HHG); Conns (CONN); GameStop (GME); Staples (SPLS); OfficeMax (OMX); Office Depot (ODP); Abercrombie & Fitch (ANF); AnnTaylor Stores (ANN); American Eagle Outfitters (AEO); Buckle (BKE); Chico's FAS (CHS); Bebe Stores (BEBE); Ann Taylor (ANN); Coach (COH); Coldwater Creek (CWTR); Nordstrom (JWN); Dicks Sporting Goods (DKS); Foot Locker (FL); Steve Madden (SHOO); Skechers (SKX); Deckers (DECK); Hibbett (HIBB); Shoe Carnival (SCVL); Target (TGT); Genesco (GCO); Urban Outfitters Inc. (URBN); True Religion Apparel Inc. (TRLG); GUESS? Inc. (GES); Lululemon (LULU); J.Crew (JCG); Hot Topic, (HOTT); Talbots (TLB); Chico's (CHS); Pacific Sunwear (PSUN); Kohl's (KSS); JCPenney (JCP); BJ's Wholesale (BJ); GUESS? (GES); Tween Brands (TWB); Gymboree (GYMB); Mens Wearhouse (MW)

In the following brief excerpt from just one of the 10 interviews in the 57 page report, a "Best on the Street" industry expert discusses the outlook for the sector and for investors.

Neely Tamminga is a principal and senior research analyst at Piper Jaffray & Co., focusing on specialty retailing: women's apparel & accessories, and personal products. Tamminga ranked as a top sell-side analyst in The Wall Street Journal 2006 Best on the Street analyst survey for her coverage in broadline and apparel retailers. In addition, Tamminga was ranked in the Top 20 sell-side analysts in 2006 by Institutional Investor magazine for her coverage of the retailing/specialty stores sector after receiving Honorable Mention in 2005 and 2004. Tamminga has also received recognition by Institutional Investor magazine for her coverage in the apparel & footwear, department stores, and hardlines retailing sectors. In 2009, FT/Starmine ranked Tamminga No. 2 Industry Estimator for her 2008 coverage in Personal Products. Prior to joining Piper Jaffray in 2002, Tamminga worked at A.G. Edwards & Sons, Inc. in St. Louis, where she covered specialty apparel retailing companies. Tamminga holds a bachelor's degree in economics from Calvin College in Grand Rapids, Michigan and a master's degree in business administration from Saint Louis University.

TWST: We've kind of got mixed reads on back-to-school, what's your view on what's happening for the fall and where do we go from here?

Ms. Tamminga: It depends on the retailer and for whom the retailer is catering. August is the second largest sales volume month for traditional teen specialty retailers; it is the second least important month with respect to sales volumes for women's apparel retailers. For women's retailers, August is typically the last gasp of summer clearance, not fall selling. What is key about this year's August for the women's apparel retailers is that they've needed to have the fashion-right product on the floor so that she'll come back and buy in September. September is the second largest month with respect to total sales volume for the women's apparel retailers.

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TWST: Are investors accepting that and looking at this space?

Ms. Tamminga: Given some of these stocks are up more than 100%, I think so.

TWST: Given that kind of move, where should they be looking at this point?

Ms. Tamminga: Our top favorite names right now are Ann Taylor, it is an overweight-rated stock. Secondly, Coldwater Creek, overweight-rated stock and Nordstrom, which we cover as a specialty retailer, not a traditional department store.

TWST: Let's start with Ann Taylor, it is a company that's had problems, have things been resolved?

Ms. Tamminga: We think they are definitely on the right path and certainly a better path than where they've been in the first half of this year. They've made many changes to the design team over the last year and we're starting to see the fruits of that improvement particularly at the core Ann division. We think as you get into the traditional selling season for fall apparel, it will become apparent, that the efforts of this new design team should result in better sell-throughs relative to expectations. Simply stated, we think Ann Taylor is back, we think the conversion rates will bear that out and this customer has been asking and in some cases begging for better apparel from this division. It should be a very interesting second half.

TWST: What are the changes that the design team is putting into place?

Ms. Tamminga: One of the things that we look for in a retailer is balance. We like to see a good balance between tops and bottoms, a good balance between suiting and casual and where Ann Taylor, we think, has been doing a better job these days is in it achieving a better balance. We are seeing a great balance of fashion-related tops and items in the assortment, items that don't look too trendy, but look very fashion relevant, and that fashion relevance we think will resonate with customers as they come into the stores in September.

TWST: Have they changed to the view as a customer or is it the same customer profile that they've always focused on?

Ms. Tamminga: We believe it is the same customer profile. This is a professional women and she earns a good income and chooses to look good at her place of employment. No doubt, professional apparel has been suffering during this recessionary time for women's apparel retailing mainly because she's probably been shopping out of her closet and not necessarily in the stores for her work apparel. But there has been some great innovation on color pallets-including grays, pinks, and purples. We would imagine as browns and navies flow into the assortment next, they might see a good read on that too.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 57 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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