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Retails Stocks To Put You At The Head Of the Class

The back-to-school shopping season has already produced a wide range of grades among retailers this year, according to Needham's Christine Chen. She finds some clear winners.

"I think the opportunity in apparel, it's actually more about product, rather than price," she told CNBC. "If you have the right product, the customer is looking for something special, her budget's been cut in half, she doesn't need another black sweater, she wants one that has something special on it."

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At the head of the class is Urban Outfitters.

"Urban Outfitters has one of the best product assortments out there," she told CNBC. "In this environment, they're getting a lot of full-price selling, and have virtually nothing on sale."

She's confident that the company's good fortunes will continue.

"Glen Senk, the CEO, is one of the best merchants in the business," she said. "They've trained the customer to not wait for the sale, because the customer knows that if they don't buy it, it might not be there next week."

She finds some other retailers using the magic formula of product, rather than price.

"Other retailers that have uniqueness in their fashion are Guess, who also has a big international presence, and even discount teen retailer Aeropostale," she said.

Disclosures:

Urban Outfitters, Guess and Aeropostale are investment-banking clients of Chen's firm.

Additionally, Chen owns shares of Guess and Urban Outfitters, and her firm makes a market in Urban Outfitters.

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