Eyes on the Catalog and Feet in the Stores
Eric Beder, CEO of Small Cap Consumer Research, LLC, talks about how his firm uses a catalog and store visits to conduct ongoing research on retail businesses. He describes the research like this:
Snapping the Catalog – “For Betterware de Mexico, we have tracked their monthly catalog since March 2021. We analyze product categories, pricing, and what items are being offered. Given that the company focuses on the Mexican consum- er, our research provides a look into their activities without having to visit Mexico and provides an insight into the Mexican marketplace.” Narrative from a research report in December
2023 said the following (specific price target re- dacted): “We are reiterating our Buy rating, [$XX] price target and projections after reviewing Better- ware de Mexico’s December catalog, which offered record SKU levels and continues to raise the bar in terms of offerings. Further, management remains focused on offering solid values, with pricing down YoY, but lower levels of discounting, as the company takes advantage of gains in the supply chain and overall logistics. Management has also continued to focus on key new categories, such as Kid’s while combining and pruning pets as a stand- alone offering. As such, we believe the Betterware division remains well positioned to drive top-line growth in 4Q and into 2024.”
Snapping the Store – “We visit 4-7 stores for four clients (BBW, EXPR, GES & VRA) monthly and have been doing this for the same stores for about four years. Although somewhat old-fashioned, visiting and understanding what is going on at the store level is still key to following retailers and we are, as far as we know, the only analyst publishing research like this monthly.” Narrative from a research report in November
2023 said the following (specific price target and company references redacted): “We are reiterat- ing our Buy rating, [$XX] price target and projec- tions for [XXX COMPANY] after visiting stores in Long Island and the New York City metro area. We believe [XXX COMPANY] is fully ready for the holiday season, with key elevated fashion offerings, including outerwear, sweaters, handbags, footwear, activewear, luggage and event-driven looks. Fur- ther, [XXX COMPANY] has continued to raise their overall game for the customer looking for logo- driven looks, with a continued expansion of head- to-toe (plus now fully accessorized) looks. As such, with the Black Friday holiday season looming, we believe [XXX COMPANY] is poised to drive strong fashion driven traffic for the holiday season.”
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