RetailersLululemon ( LULU) and Ralph Lauren ( RL). Retail apparel. Here's a space where plenty of companies coexist, but only the strong and well-positioned thrive. I only want to be long a handful of retailers. Generally, I will only consider apparel companies that operate from an Apple ( AAPL)-like position of strength. They need to score high on at least one of the following three counts:
The company has a curious business plan: It runs out of things on purpose (an attempt to boost demand by creating scarcity), it doesn't generally discount its products, it doesn't open new stores very often, and it doesn't electronically track customer purchases.That was not an earthquake you just felt. It's a Steve Jobs' Bozo explosion bubbling to the surface. I see LULU getting to the point where Ralph is now in about five-to-10 years.