TJX Companies Inc TJX:NYSE

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Lululemon, Nordstrom Among Retail Brands Favored by Consumers During COVID-19 Crisis, Goldman Sachs Says

1:52PM ET 6/08/2020 MT Newswires
Yogawear maker Lululemon Athletica (LULU) and department store Nordstrom (JWN) are among brand winners with shoppers at a time that the US is emerging from COVID-19 lockdown measures, according to Goldman Sachs.

"All retailers saw sharp declines in 'bought' metrics through April and May, with off-price showing the most marked declines given their lack of e-commerce presence," the investment bank said in a research note Monday. "However, affinity trends diverged markedly across the group."

"Affinity" measures the level of positive attitudes among consumers toward brands and retailers and "bought" trends is a metric providing insight into self-reported purchase trends, said Goldman Sachs, which said it leverages daily survey data from trend forecaster WGSN for its coverage. The survey respondents are women based in the US.

"Lululemon was notably strong throughout the COVID-19 store closure period, with the consistent strength we've seen for some time accelerating into May," said Goldman, noting that athletic wear companies have largely been outperforming other types of retailers. Nike (NKE) and Under Armour (UA) posted "strong" affinity increases in March and April but the increases significantly declined in May. "We believe this could be due to cycling (year-over-year) compares on new product launches."

Many Americans purchased workout wear during the coronavirus lockdowns as people exercised at home during gym closures. Now, retailers across the US have been reopening as local officials try to balance economic recovery with preventing the spread of virus infections. The pandemic has killed more than 403,000 people worldwide and has infected 7.06 million, according to Johns Hopkins University data. All 50 states have allowed stores to reopen with restrictions. New York City on Monday let retailers begin offering curbside and in-store pickups of purchases.

The survey data showed Nordstrom and TJ Maxx (TJX) with "consistently strong trends in consumer affinity in recent months despite store closures," while Macy's (M) and Burlington Stores (BURL) suffered trend significant deterioration.

Nordstrom was an "outlier" among department stores, said Goldman Sachs, who said it observed elevated promotional activity from the company. The analysts "also believe Nordstrom's customer base is likely to be less impacted by near-term COVID-19 employment impacts, which may have contributed to self-reported purchase momentum," they said.

Overall, Goldman said the majority of brands and retailers it tracks saw improvement in online purchase activity in May compared with April on a year-over-year basis. "This comes despite incremental store openings for most brands and retailers across the US, indicating consumer willingness to spend remains healthy."

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