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BB&T Capital Markets Retail Analyst Scott Krasik on what the retail sector needs to do to boost sales.
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Very much well that retailers seem to have a bit of -- holiday hangover today no doubt about that but my next -- says.
They need to help customers know when a sale really isn't sale struck Catholic test us classic that is -- capital markets we -- analysts.
Joining me now to Fox Business exclusive Scott.
What do you mean people will go to be told when a sale is really -- -- Well like call it it really -- 2008 during the recession.
Gonzo promotions 70% up 80% off.
Really telling -- customers they need to come in today to buy and retailers and weaning themselves off of that.
This year we noticed -- channel checks that there is more of an everyday low pricing strategy.
Wal -- the expert -- it -- customers' trust Wal-Mart when they tell you at the lowest price.
When you walk into a retailer like Joseph A banks.
Which constantly offers buy one get one by -- get two free sometimes get by Obama's -- -- V the message at least in the last few weeks has been come in every -- get a suit for 200 dollars net I don't think of that resonates with the customer.
Dress Barn which is part of this -- a retail group which is a company we follow.
They were selling -- this year for about twelve dollars each last year they may have been 25 but -- was by going get one free so the deal may have been better this year.
But in the customers' minds and lets you built that trust knowing that the really getting.
Their lowest price possible it's a tough -- you say that.
Yes it's been the worst performance apparently from.
The one and analysts say as it was before and since 2000 late but you say would blaming the wrong things -- this.
Who should we be blaming.
Well I think it's.
You know it's always a product thing with retail and what we've focused on.
Is that while the overall growth that is -- great.
People that are doing well there have been doing well our continued to do well so you know -- boots for example are still very hot commodity this Christmas Michael quartz watches.
Very very popular.
-- sweaters winner jackets there's probably some external factors impacting them let's look ahead 2013 -- -- you like.
Who do you not like consult with -- like going into the new year.
Well.
Apparel been a tough category -- have to be picky.
In apparel -- names that we like there Hanesbrands.
-- maker of Hanes underwear champion.
-- -- where.
And the others Carter's baby clothes.
Both.
Both companies so products -- little less discretionary.
And they also both benefit from lower cotton costs year over year.
Carter's last quarter -- gross margin was up almost a thousand basis points and you're gonna see that -- went into the first half of the year Hanesbrands has a deleveraging event.
They're using the lower cotton costs to pay down debt and they're gonna go from a highly -- company.
To regular sort of under two times what about some of the big names of Macy's.
JC Penney JCP I should call it as in -- -- -- is flat.
Strategy working for them but JC Penney's.
Is attempting that everyday low price strategy didn't work in 2012.
What they have going for them -- they have the confidence of the suppliers the suppliers like a Carter's like -- Hanesbrands companies that we follow.
Are still willing to work with them to invest in shop in shops and create product exclusive to JC Penney.
I don't know if that's gonna happen in 2013.
I know from our standpoint -- -- and fewer companies we follow -- They're gonna get the lift.
If JC Penney traffic improves and thirteen and we view as a possible catalyst interest -- who do you not like who would you avoid.
Well a company that we just.
Recent lower our rating on is a seen a retail group from -- it's especially apparel retailer great management team.
But -- in the sweet spot.
But where the customers and shopping and it's in the value were handed missy category -- tell -- women ages thirty to sixty they have enough stuff in their closet and if they're worried about the fiscal cliff.
Bit of a person why stop shop and great stuff -- -- that -- -- -- like BBC.
Capital markets we -- analyst thank you very much creative thinking.
