The One Brick-And-Mortar Retailer To Invest In: Francesca’s Holdings Corp (FRAN)

However, Francesca’s Holding’s biggest ace up its sleeve isn’t the flexibility of its stores: the flexibility of its inventory. As noted by Mignon McLaughlin, a former Managing Editor of Glamour Magazine, “women usually love what they buy, yet hate two-thirds of what is in their closets.” Many people, men and women alike, desire freshness and dynamism in their clothing options; they want access to the latest fashions and constantly evolving styles. Francesca’s caters perfectly to this desire by introducing new merchandise to its boutique stores five days a week. This constant rotation of clothes means that customers will never be bored by the selection at Francesca’s and will also develop a sense of urgency in buying clothing at Francesca, knowing that the product might not be at the store in a couple of days. The rotation also ensures that Francesca’s can pounce on developing fashion trends quicker than its competitors. Moreover, Francesca’s Holdings carries a varied selection of clothing, but only small quantities of individual items. This allows Francesca‘s to appeal to a wide variety of customers while at the same time dangling an emphasis on limited quantities over them.

Finally, Francesca’s Holdings is extremely flexible in terms of store interiors. No one Francesca‘s store is the same, and each boutique is uniquely designed to feel like its an independent store. Thus, customers are never bored by same store interiors, leading to what Francesca’s calls a “differentiated shopping experience” every time a customer steps into a different Francesca‘s.

The flexibility of its store sizes, merchandise, and interior decorations have worked to put Francesca’s Holdings on solid financial ground. In its last 3 reported quarters, Francesca’s Holdings grew its earnings an average of 93%, something unheard of in the brick-and-mortar retail industry. Moreover, huge growth for Francesca’s Holdings has been the norm rather than the exception: it has had 4 consecutive years of annual earnings growth and its earnings have grown in the last 3 years by an average of 58%. Francesca’s Holdings also has solid profitability: its annual pre-tax margin is a healthy 20.2%. These numbers blow away those of its competitors, such as Macy’s and J.C. Penney, proving that, if there is one brick-and-mortar retailer you should invest in, its Francesca’s Holdings

The article The One Brick-And-Mortar Retailer To Invest In originally appeared on Fool.com and is written by George Liu.

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