The Latest in College Trends: The Retail Sector

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Sometimes even experienced investors and traders get so bogged down by top-down growth trends that they miss the grassroots growth movements. College students, who make up 20 percent of the general US population, on the other hand are much more aware of their surroundings.

In fact, they may be onto something big.

Below are a few trends sweeping U.S. campuses in 2014 and perhaps driving growth in these companies in the coming months.

Lululemon Athletica
(NASDAQ:
LULU
)

Though Lululemon hit a rough patch after welcoming in its new CEO, Laurent Potdevin in December 2013, the famous stylized ‘A' logo remains an iconic campus symbol throughout the country.

Walking into a campus gym is like walking into the store itself: form leggings to tops to headbands. Even if the gym isn't your scene, the black “wunder unders” are a staple of every girls' closet.

The term “lulus” seems to be replacing the word leggings, as we know it. While the company's quarterly results don't deserve any applause, the annual figures certainly show hope.

With 2013 comparable sales rising four percent and DTC sales up by 33 percent, Lululemon may be well on the road to recovery with college girls carrying some of the team.

Opening 43 net new corporate stores this past quarter wasn't enough to satisfy all of the international demand. Thus, immense growth opportunities remain in the Asian, European and Canadian markets – all regions where Lululemon is working on opening stores.

Ray Bans
(NYSE:
LUX
)

What better way to meet spring than with a brand new pair of Ray Bans…or so the college student philosophy goes. From the classic aviators to the “clubmasters” to the “new wayfarer”, once they come out for the summer season, they never go back in.

The umbrella company, Luxottica, that encompasses Ray Ban experienced an unprecedented growth in sales of 3.2 percent, meanwhile its EPS saw a lofty 12.2 percent boost in FY 2013. That may be just the beginning.

The eye-wear market was valued at 81 billion dollars in 2011 and is positioned to grow to 130 billion dollars by 2018, according to Transparency Market Research. No doubt Luxottica can harness that momentum, driven first and foremost by emerging markets.

Plus, partnering with Google (NASDAQ: GOOG ) to create the new Google Glass eyewear could be a pivotal long-term move for growth as well.

Timberland
(NYSE:
VFC
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)

Women aren't the only ones keeping up with the latest trends. From boots to boat shoes, Timberland seems to be the go to brand for male college students this year. “Tims” derive their versatility from style and their practicality from their robust build; both make them a necessary investment for a college student.

As the Eurozone figures grow stronger, so will those of VF, the current parent of Timberland, since Timberland is VF's most developed brand in Europe when it comes to sales.

The North Face
(NYSE:
VFC
)

VF has more to show for itself than Timberland, however, and college students seem to be way ahead of the curve. The North Face coats pulled them through the polar vortex, the windbreakers are easing them into Spring and the backpacks, well they're a fashion statement in and of themselves.

The North Face, Timberland and Vans together accounted for 56 percent of VF's 2013 revenue, which grew by a total of five percent in the last year. VF's international business expanded by eight percent and as emerging markets crave more of both brands, VF is following up on that call.

Michael Kors
(NYSE:
KORS
)

What is it about all things sparkly that makes many women unable to resist the urge to splurge? Let's consult Michael Kors, whose watches, handbags, leather jackets and other small accessories are sweeping the college nation.

Despite unexceptional earnings results for the past 3 quarters due to decelerated growth, Q3 in 2013 finally showing a reversal. Surpassing the 1 billion quarterly revenue mark for the first time ever could be a powerful signal for new investors.

While the company's target demographic thus far has been in North America and Europe, it has opened a new store in China and two in Brazil. It's international presence in both of these regions will likely rise in the coming months.

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Posted In: Long IdeasEducationTopicsTrading IdeasGeneralGoogleLululemon Athletica Inc.LuxotticaMichael Kors Holdings LtdRay BanThe North FaceTimberlandVF Coporation
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