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<< Return to Part III

As we enter into this Christmas season, that can only mean one thing: Shopping. This article is meant to give a personal perspective of how the retail sector is shaping up for this year and into the future. For this experiment and research I have used the closest mall in proximity to me, the Woodland Mall.

This mall, owned by Pennsylvania Real Estate Trust, has been open since 1968. Over 100 stores, restaurants, and kiosks operate in 1.1 million square feet. Many of the stores are privately owned or are small, local players and have been left out of this article. Let’s take a look at some of the stores entering their busiest time of the season.

All yields, share prices, and analysts’ estimates are taken from Yahoo Finance upon market close Friday, November 25. Current and next year's earnings are analysts estimates for the current fiscal year and the following one. Earnings are listed on a per-share basis.

Today, in this continuation, we take a look at the publicly traded Jewelry Stores in Woodland Mall.

Store: Fossil (NASDAQ:FOSL)

Fossil sells high-end watches and accessories at its mall locations. The company has recently attempted expansion in Asia.

  • Competitors: Coach (NYSE:COH), Tiffany (NYSE:TIF)
  • Share Price: $81.26
  • Current Earnings: $4.52
  • Next Year Earnings: $5.54
  • Dividend Yield: 0
  • Number of Stores: 360 (as of 09/09/11)
  • Recommendation: Hold

Luxury goods sales are increasing overseas as the middle class grows. If numbers come in strong for Fossil over the domestic holiday season, shares could be poised to breakout. The company has struggled to catch on in China as other competitors gain a Chinese audience and gain market share.

Store: Icing, owned by Apollo Private Equity Group (NYSE:APO)

Icing and Claire’s Stores were bought out by Apollo Private Equity Group. The stores compete in the “tween” market aimed at young teenage girls.

  • Competitors: Justice (NASDAQ:ASNA)
  • Share Price: $11.12
  • Current Earnings: -$0.35
  • Next Year Earnings: $2.26
  • Dividend Yield: 2.4%
  • Number of Stores: Claire’s Operates Icing and Claire’s Around the World with over 3000 stores
  • Recommendation: Buy

The large private equity group Apollo owns the Claire’s brand, which is represented twice by this mall with Claire’s and Icing stores. The large Apollo Group also owns brands like AMC Entertainment and Caesars Entertainment. The shares went publicly recently this year and represent a great buying opportunity as the IPO market heats up and companies are taken public. As more companies are spun off private equity groups enjoy profits from past buyouts.

Store: Zales (NYSE:ZLC)

Zales is a jewelry store with locations often found in shopping malls.

  • Competitors: Tiffany (TIF), Jared (Private)
  • Share Price: $3.09
  • Current Earnings: -$0.47
  • Next Year Earnings: -$0.02
  • Dividend Yield: 0
  • Number of Stores: 650
  • Recommendation: Buy

This smaller jewelry store often found in malls trades for a market capitalization of around $100 million. I think the company could be a nice takeout target. Look for a strong jewelry season over the holidays.

Summary

  • Fossil, $81.26, Hold
  • Icing, $11.12, Buy
  • Zales, $3.09, Buy

Continue to Part V >>

Source: Hitting The Mall For The Holiday Season, Part IV: Jewelry Stores