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7 Black Friday retailers to invest in right now: strategist

Brian Sozzi
·Editor-at-Large
·3 min read

Armed with savings from not having to travel to work during the COVID-19 pandemic — as well as skipping that summer vacation — consumers who are employed could be poised to shower a select few retailers with some love this holiday shopping season.

That’s provided they have an outsized web business that is easy for consumers to use and compelling gift-able merchandise, argues one veteran retail analyst.

“The e-commerce platforms like Amazon will do extremely well. I think Walmart and Target have done exceptionally well in beefing up their digital offerings,” JJK Research founder Janet Kloppenburg told Yahoo Finance’s The First Trade. Kloppenburg points to American Eagle Outfitters (including its Aerie intimate apparel business), Gap (and its workout wear brand Athleta), Lululemon and Ulta Beauty also being well positioned for a good holiday quarter.

Investors seem to agree that these are the names that could steal the holidays.

With the exception of American Eagle Outfitters and Lululemon, all five of the retailers mentioned by Kloppenburg have seen their stocks materially outperform the S&P 500 this past mont, according to Yahoo Finance Premium data. Lululemon and Gap (yes, long beleaguered Gap) are tied for the lead over the past month, each notching 17% gains.

Says Kloppenburg, “Consumers aren’t spending on traveling or entertaining so they are shifting their spending right now to create more comfortable work-from-home, study-from-home lifestyles.”

Make no mistake, however, even the well-positioned retailers will have to duke it out for sales amidst a likely ultra-competitive holiday shopping season.

KING OF PRUSSIA, PA - NOVEMBER 28: A man shops for a television in Walmart on Thanksgiving night ahead of Black Friday on November 28, 2019 in King of Prussia, United States. (Photo by Sarah Silbiger/Getty Images)
KING OF PRUSSIA, PA - NOVEMBER 28: A man shops for a television in Walmart on Thanksgiving night ahead of Black Friday on November 28, 2019 in King of Prussia, United States. (Photo by Sarah Silbiger/Getty Images)

The holiday season has started earlier than ever before thanks to the pandemic, with Amazon Prime Day being held this month instead of the summer. Target, Walmart and Best Buy responded with aggressive sales of their own during Prime Day. Big-name stores will stay closed on Thanksgiving to give workers a break and reduce the spread of COVID-19 from large crowds. And merchandise in mall stores is expected to be sparse as brands have struggled with capital this year.

Meanwhile, there is no new stimulus plan from lawmakers — putting holiday season spending at risk of a letdown for all parties involved.

“Demand has been there — we saw that in the results we just printed,” V.F. Corp CEO Steve Rendle tells Yahoo Finance when asked about his concerns on the lack of stimulus. V.F. Corp. is the parent company of The North Face, Timberland and Vans. “Inventories at retail are in good shape, which is an indication that the consumer is showing up.”

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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