Looking for a hot retail deal space for 2012? Look no further than the teen and youth lifestyle segment.
While at first glance the sector may look extremely competitive, it in fact presents attractive deal and investment dynamics and opportunities. For many companies, the idea of operating in a private setting is quite appealing, since it provides the possibility for a turnaround without the constant short-term scrutiny of Wall Street. It also allows a rapidly growing company to accelerate its growth by deploying private capital more aggressively. For investors, the challenge is to find the company or companies that promise the right risk-adjusted potential returns.
Speaking of investing in the teen specialty retail segment brings to mind an old Rolling Stones song (yes, today’s teens still listen to The Stones): “You can’t always get what you want … but if you try sometimes, you just might find you get what you need.” So how should potential investors think about this space?
Let’s get the bad news out of the way first. [Read more...]