Mid level luxury brands are feeling the headwinds of a tentative consumer market. With the strong dollar deterring international shoppers, aspirational brands like Ralph Lauren (RL), Michael Kors (KORS) and Coach (COH) are struggling to attract shoppers. So are the mid level luxury brands in crisis or have they just hit a temporary speed bump? Cowen and Company's Senior Retail Analyst Oliver Chen says mid level luxury will bounce back. Handbag profits have suffered from end of season promotional sell offs but Chen remains bullish on mid level brands like Kate Spade (KATE) and Tiffany (TIF), which he says have plenty of growth potential. But tellingly, for long term investments Chen suggests investors look to the cost cutting budget brands like Costco (COST), and TJX (TJX). Target (TGT), says Chen is a retail winner, driven by strong execution in signature categories and impressive digital growth, despite its online hacking scandal last year. For investors looking to give their portfolio a makeover, Chen suggests the beauty sector as one to watch, with a 'nice growth rate of 8-10 percent.' Ulta Cosmetics (ULTA) and Sally Beauty (SBH) were firm favorites, both of which have strong loyalty programs and customer relationship management, according to Chen. Oliver Chen has no financial interest or position in any of the above mentioned stocks.