Naked Brand Group Ltd (NASDAQ: NAKD) is having a great day in the market today, gaining more than 25% early on. What’s strange is that there has been no news released by the company, suggesting that this run in value would be coming.
Nonetheless, there are a few good reasons to be excited about the company and its potential growth ahead. Here’s how I see it:
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Reason #1: NAKD Is Reshaping Retail
Long gone are the days of the classic brick and mortar retail store. Online venues offering pricing that is hard to compete with and convenience that consumers enjoy have turned malls across the United States into ghost towns.
The mall in closest to my town seems to have more empty spaces than filled ones, and that seems to be the trend across other rural towns. The bottom line is that retailers need to be edgy to make it in today’s market as a brick and mortar outlet.
Nonetheless, Naked Brands was recently featured in an article on Business Insider, pointing to the turning point that its stores are making in retail as a whole. The company is staying on the top of the latest trends, and constantly rotating new options in and old options out. This is creating a sense of urgency in consumers, making them more likely to buy!
The company also has a large competitive advantage when it comes to cost. To rent a small retail store in the heart of shopping districts in New York could cost $25,000 per month or more. However, NAKD pays nothing. The company already owns retail in shopping districts with heavy foot traffic, allowing it to compete in ways that smaller brands that may need to rent simply cannot.
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