Wunderlich: Specialty, Footwear And Apparel 'Looking Up, But Not For All'

In a note to clients on Tuesday, Danielle McCoy of Wunderlich Securities stated that the outlook for consumer-driven brands are beginning to improve as unemployment continues to fall, raw material prices declining and lower gas prices result in consumers having higher disposable income.

“That said, all is not rosy, as rising labor costs, a stronger dollar, limited pricing power, and what we view as one of the most competitive industry environments in the economy should continue to weigh down on profits, especially in the specialty retailing sector,” McCoy wrote. The analyst added that “differentiated brands” should yield “sold returns” in 2015 as they drive consumer loyalty.

McCoy's favorite names in the footwear space include Deckers Outdoor (NASDAQ: DECK), Steve Madden (NASDAQ: SHOO) and Wolverine World Wide (NYSE: WWW).

L Brands (NYSE: LB) is listed as McCoy's favorite inner-wear player.

McCoy goes on to state “we have no favorites” within the specialty retailing space due to tough competition, weak customer base and poor fashion sense rule.

McCoy stated that Omnichannel will “continue to move from being a buzzword to a real trend” in 2015, resulting in better inventory execution, higher returns and a deeper relationship between the consumer and retailers.