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Success for Boutiques? In the Second Cities

By CNBC.com
Thursday, 7 Feb 2008 | 2:47 PM ET

Which boutique retailers are getting ahead despite the general consumer pullback these days?

The ones concentrating on secondary markets, according to one expert.

"That gets lost on these money managers," said Brad Stephens, Morgan Keegan senior analyst, in an interview on CNBC's "Squawk Box." "They say: 'Ah there’s a lot of boutiques.’ There’s not in a lot of these secondary cities."

Retailers like Urban Outfitters and its affiliate, Anthropologie, are particularly adept in this strategy, he noted. (See his full interview here). Similar types of retailers include Aeropostale and American Eagle Outfitters .

Discounters like Wal-Mart also stand to gain as they move into fashion areas typically dominated by specialty outfits, Stephens suggested.

"Past 2-3 years you’ve seen a lot of investors hide out in the teen retailers. We’re finally seeing some of the teen retailers roll over ... I wouldn't be surprised to see discounters do remarkably better," he said.

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