We all love to find a nice reliable company to sink some hard-earned cash into, but sometimes the cards don’t fall in our favor. Every now and then, I come across a great company only to discover that I simply can’t invest, as the company is privately held. Think of this as window-shopping: You know you can’t buy any, but you might get some good ideas. Here are three companies that I’d happily invest in — if only I could.
The higher end of fashion
Banana Republic is The Gap Inc. (NYSE:GPS)’s current problem child. The company had flat comparable sales last quarter, and net sales were up just 4%. Out on the hard streets of The Mall, Banana’s biggest competition comes from J. Crew, which has experienced a resurgence in the last few years. While the company is privately held, it still reports some financial information each quarter.
In the company’s last fiscal year, comparable company sales increased 13%, with revenue increasing 20%. The company’s margins expanded all the way down the income statement, and EBITDA jumped 27%. On top of the fantastic financials, J. Crew’s fantastic brand is represented in its 240 retail locations, with another 100 or so outlets. If J Crew came back on the market, I’d be first in line to pick it up.
Just kidding — this is the higher end of fashion
If you don’t fancy yourself a buyer of $300 sweaters, maybe you could be tempted by one of Tory Burch’s $425 cardigans. Burch is a New York-based fashion designer in the same league as Michael Kors Holdings Ltd (NYSE:KORS). Her designs have shown up on the shoulders of celebrities across the globe, just like Kors’.
While J. Crew is a more mature company, Burch is just gearing up, much as Michael Kors Holdings Ltd (NYSE:KORS) was a year and a half ago. Bloomberg has estimated that Burch’s company may now be worth over $3 billion. Considering that Michael Kors Holdings Ltd (NYSE:KORS) is now valued at over $12 billion, there’s a long way for Burch to run.
In addition to its normal line of fashion, Burch has recently entered into an agreement with Fossil Inc (NASDAQ:FOSL) for the sale of Burch-branded watches. Fossil Inc (NASDAQ:FOSL) is the maker behind Michael Kors Holdings Ltd (NYSE:KORS) timepieces, and the company has said that the high-end designers are both big drivers of future growth. Basically, I see Burch as a way to re-create the magic of Michael Kors Holdings Ltd (NYSE:KORS) — and that hasn’t been a bad thing.
The delicious end of — well, food
The final company that I’d dive into given a chance is the Five Guys hamburger chain. When CEO Jerry Murrell came by the Motley Fool office last year, I was instantly sold. Not only is the company a purveyor of quality burgers, it’s also run in the classic American manner. Murrell is a fan of doing a few things very well, and he’s resisted taking on extra menu items.
Unlike J. Crew and Tory Burch, the reason I want in on Five Guys is for the beautiful simplicity of the business. Murrell now oversees a business that should generate over $1 billion in revenue in 2013. While the company is still far short of McDonald’s Corporation (NYSE:MCD) $6.6 billion, Five Guys seems to be managing a feat that McDonald’s has failed at over the last few quarters: growth.
