An interesting time to study retail. Few are making real money - despite the eye-watering gross margins, for example, between garment costs and selling prices. Labour costs are well contained via casualisation and a ready pool of unemployed. Rents are a nightmare as very low interest rates raise landholder incentives/imperatives to be fussy about tenants and demand onerous terms. I anticipate a big washout in retail RE as tenant/landholder conflicts are played out.
My sector picks are PGR and MYR. Both my positions are underwater but my radiant optimism persists.
Ash
PGR Price at posting:
37.0¢ Sentiment: Buy Disclosure: Held
