Citi: We Checked Out The Shopping Malls, And This Is What We Saw

shopping mall

Photo: davidyuweb, Flickr

With Black Friday, and the official start of the holiday season, less than a month away, retailers are finalising  plans for what could be a pretty good November and December.Citi, in three separate reports out this morning, took investors on a shopping tour. They noticed some positive trends at department stores, clothing, and even a tech retailer.

The group of six look best positioned this winter, even against macro headwinds.

Kohl's (KSS)

With the Jennifer Lopez and Marc Anthony brands finally in stores, a new type of client has emerged at the big box store. Customer response has been very strong and Kohl's is using the opportunity to move sales in categories positioned adjacent to Lopez and Anthony on the selling floor.

Citi takes a mostly favourable view as the company begins slowly expanding again. However few product introductions, regardless of Lopez's new line, has made for a boring store assortment. Citi assigns a target price of $70.

Source: Citi analyst Deborah Weinswig

Macy's (M)

This holiday, Macy's is pushing its celebrity designer collections further than in the past. The retailers is reformatting its store-in-store gift shops and is devoting more square footage to private label I.N.C., where it has continually improved margins.

Citi is very positive on Macy's as the company's My Macy's initiative -- a plan to tailor assortments by store -- and store integration provides lift for the stock. Citi assigns a price target of $45.

Source: Citi analyst Deborah Weinswig

Target (TGT)

Target has seen a healthy response to its 5% rewards program, which has boosted frequency of visits and customer loyalty. The company's fashion forward fix will continue into holiday with four new designer collections, spurring momentum.

Citi has Target as a Buy as same-store sales growth and margin expansion help the retailer. Citi assigns a price target of $63.

Source: Citi analyst Deborah Weinswig

Abercrombie & Fitch (ANF)

Abercrombie has finally returned from the brink. Hollister division is continuing to gain share in the teen segment and new Gilly Hicks lingerie brand may survive as it gains traction. Abercrombie & Fitch segment may see difficulty with foreign exchange rates and source costing.

Citi called out this stock, along with ANN, as one of its bright picks from its holiday mall trip. Higher pricing could push consumers away, but Citi believes concerns are overblown. The firm assigns ANF a price target of $72.

Source: Citi analyst Jeff Black

Ann Taylor (ANN)

The retailer is finally embracing colour and new assortments delivered this October should boost sales. Planned promotions should not cannibalise margins and conversions of sales at Ann Taylor's Loft division will help the company.

Citi is positive on Ann and sees room for upside. Traffic has been holding up on the back of sales as the company shifts its price point to sub-$50 at Loft. Citi assigns a price target of $30.

Source: Citi analyst Jeff Black

Best Buy (BBY)

Management moves to increase associate knowledge in the appliance arena is helping drive sales, as the company still faces stiff LCD price erosion. Best Buy has been able to better compete with Amazon as in-store pick up takes off.

Citi was encouraged by the signs from the big box retailer, but maintained its sell rating as the company continues its turnaround. Citi assigns a price target of $21.

Source: Citi analyst Kate McShane

Consumer shopping trends

Earlier this month, Citi revealed how it expected consumers to shop this year.
Check out the full report here >

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