Wedbush Heads To The Shopping Malls On A Pre-Holiday Finding Mission

Morry Brown of Wedbush and his team spent plenty of time at shopping malls observing traffic first and discussing traffic trends with store managers through the first three weeks of December.

Here are his highlights:

• Specialty Retail: Lululemon Athletica inc. LULU and Gap Inc's GPS Old Navy were “traffic winners,” according to Brown who notes that both stores have seen strong traffic and conversion trends.
• Handbags: Coach inc COH saw “notably weak” sell-through while Michael Kors Holdings Ltd KORS and Kate Spade KATE handbags were “hot gift items.”
• Department Stores: Nordstrom JWN and Macy's, Inc. M were able to take traffic away from Specialty Retailers, generating impressive traffic. However, the analyst cautions that Nordstrom may struggle when it shifts back to a full-price model next year.

• Footwear: Foot Locker, Inc. FL benefited from strong new shoe releases while basketball and footwear items remain a hot gift item. However, the analyst observed demand for men's apparel was lacking. Overall, the company had “low clearance levels” and still managed to generate strong traffic levels.