As already evident from this holiday season where growth in direct business was much better in comparison to its retail business, we expect the trend to remain the same in 2012. The growing number of smartphone users and increasing penetration of Facebook among netizens ensure that 2012 is going to be excessively competitive in this channel.

We note that in our estimates for Gap and Abercrombie, Internet sales now account for around a quarter of the equity value.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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