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5 Retail Predictions for 2014

Nine West Reunites With Its Founder

1 Famed footwear fashion guru Vince Camutobuys back Nine West from Jones Group's (JNY), the shoe chain he started 35 years ago.

"Reuniting Vince with his earlier brand [will] capture some attractive full-price leases and improve their return-on-investment while at the same time, move Nine West retail to a mostly outlet concept," says Marie Driscoll of Driscoll Advisors.

RadioShack Cedes to Competitors

2. This year's holiday season will mark the last one for RadioShack (RSH - Get Report) in its current form, forecasts Brian Sozzi, CEO and Chief Equities Strategist for Belus Capital Advisors.

"The main reason for RadioShack's extinction: it sells nothing of relevance for new tech upgrade cycles or the actual devices in the new tech upgrade cycle," Sozzi says. Ouch.

So, what can go in the empty storefronts? "Google (GOOG) pop up shops, or even Wal-Mart (WMT) pick up locations," Sozzi says.

In all fairness, Wall Street has been predicting RadioShack's demise for many years. Perhaps the prediction could turn out the other way around, and Radio Shack re-energizes 2014's comeback kid. Well, don't count on it.

Home Hardline Retailers Continue to Shine

3. In 2014, home price growth may slow and housing affordability may become slightly less attractive but the underlying demand continues to move as "more normal levels and pent-up demand provides an additional lift, particularly toward big-ticket categories like flooring," according to Wedbush Securities' 2014 Consumer/Retail Sector Outlook published on Dec. 17.

"We definitely see retailers exposed to the housing market in the 'haves' category. Housing continues to recover, providing significant benefits to home improvement retailers -- particularly those with exposure to big-ticket discretionary project spending," Wedbush vice president Seth Basham writes in an email. "We have our eye on companies like Lumber Liquidators (LL - Get Report) as well as Lowe's (LOW - Get Report) who stand to benefit from the strengthening housing cycle."

Lumber Liquidators is one of Wedbush's top picks for 2014. "We believe CEO Rob Lynch has transformed [Lumber Liquidators] into a best-in-class vertically-integrated growth retailer with enormous tailwinds supporting a medium-term 03% EPS growth rate on top of 63% growth in 2013," the Wedbush note says.

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