Wedding demand could be a key factor driving many retail and apparel stocks higher.
According to research firm The Wedding Report, wedding-related products and services are booming in 2022 as many COVID-delayed weddings are booked this year. Per the firm’s data, sales of these products are set to increase by nearly a third to $68 billion. That figure surpasses even pre-pandemic levels.
To be sure, inflation could cut into the higher-end retailers that typically capitalize on wedding season. Per BLS data released last week, men's formal wear prices surged 14.5% in March while dresses drove over 10% higher. While those wedding-goers eager to sport luxury offerings from LVMH Moët Hennessy (OTCPK:LVMUY) are unlikely to be deterred, mid-price options may be more greatly impacted.
As such, Jefferies recently wrote that resellers could be in a prime position to benefit.
"Macro conditions could prove a further tailwind to the resale market, as widespread inflation constrains the consumer’s wallet," the firm wrote in a note. "Roughly 1/3 of respondents making [less than] $100K/yr reported cutting back on apparel. Furthermore, financial constraints could encourage more selling of goods."
As such, Rent the Runway (NASDAQ:RENT) is seen as a top pick as wedding attendees seek appropriate nuptial attire.
The company itself also cited an “outsized pipeline of weddings and social occasions in 2022” as a key to growth in 2022 during an earnings call last week. That pipeline is estimated to be about 2.6 million weddings in the US, the highest number in decades.
Stocks like Kohl's (KSS), Macy’s (M) and Nordstrom (JWN). ThredUp (TDUP) and Farfetch (FTCH) are set to benefit from the same trends, explaining their move to the upside in tandem with Jefferies’ top pick on the day.