14 retailers shaking up the industry

Retail brands to watch

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For all the retailers whose businesses have become obsolete due to changing consumer preferences, there are other names that are capitalizing on these shifting trends, and using them to catapult their expansion.

Whether it's a fast-fashion brand that's keying into shoppers' thrifty nature, or a traditional retailer spinning off a new concept to attract a wider swath of consumers, these companies are making waves in the industry for their own distinct reasons.

They also differ greatly in size. While some of these disruptors are private companies with a few U.S. locations, others are megaretailers that already boast thousands of stores.

Just because they're on the growth track doesn't mean they're not facing challenges. Some are plotting growth even as sales at their existing stores come under pressure.

Sometimes, it can be size itself that trips retailers up—a trend that's been evidenced by the massive store closings the industry has experienced over the past few years.

To see a list of companies that are stirring up the retail sector, click ahead.

Five Below

Source: Five Below

Combine dollar-store prices with the teen-friendly vibe of Claire's accessories, and you get Five Below—where everything costs $5 or less. The rapidly expanding retailer recently opened its 400th store, and will open around 70 new locations this year. That's on top of 62 new shops last year, and 85 others planned for 2016.

"Five Below is a treasure hunt for kids," said Farla Efros, president of HRC Advisory. "The company caters to the wants versus needs of its young customers. Need six different iPhone cases? Probably not. Want them all? Of course!"

Although the company's shares have had a tumultuous run since it went public three years ago, its growing store count—along with positive sales trends at existing stores—is expected to boost its overall revenues to around $827 million this year, according to Stifel Nicolaus estimates. That would be nearly double its 2012 sales.

Forever 21

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Fast-fashion retailer Forever 21 first opened its doors more than 30 years ago, and reached 100 stores 16 years later. Growth has since gone into overdrive, topping 700 locations and ringing in sales of $4.4 billion in 2014.

The privately owned brand has set a goal to open hundreds more stores and reach $8 billion in sales by 2017. It's also expanding its lower-price F21 Red concept, which has eight locations, with plans to open 37 more this year.

Restoration Hardware

Restoration Hardware display from the company's website.
Source: Restoration Hardware

Known as much for its massive catalogs as for its ultra-chic stores, Restoration Hardware has multiple levers for growth. Along with adding stores for its namesake brand, the high-end furnishings retailer recently announced that it will launch a new concept, RH Modern, which offers a more contemporary taste.

"We believe RH Modern diversifies the company's design aesthetic—and in turn, should attract new customers that may not have previously responded to RH's more classic style," BB&T analyst Anthony Chukumba wrote in a recent note to investors.

In its first-quarter earnings report last month, the retailer added that it has "multiple new concepts and services" in the pipeline. Since going public at $24 a share in 2012, Restoration Hardware's stock has quadrupled. Still, Chukumba sees more upside, and has placed a $120 price target on its shares.


Source: Madewell

J.Crew's comparable store sales have taken a beating over the past year, causing the retailer last month to lay off 175 corporate employees. But there's a bright spot. The company's Madewell concept, which offers a more laid-back feel than its namesake label, is posting double-digit same-store sales gains.

J.Crew plans to capitalize on this growth by opening 20 Madewell stores this year. The label recently partnered with Nordstrom and is now sold on the department store's website and in a handful of its stores.


A Marshalls store in New York
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The parent company of T.J. Maxx and Marshalls isn't letting a little thing like having more than 3,400 stores get in the way of its expansion plans. As growth in the off-price sector continues to outpace the overall apparel market—a trend Moody's forecasts will continue "for at least the next five years"—TJX has laid out plans to grow its chains to nearly 5,500 locations.

Despite this growth, the company's same-store sales have remained consistent, rising 5 percent in the first quarter.

Charming Charlie

Shoppers walk past a Charming Charlie store in Manhattan
Source: Charming Charlie

Launched more than a decade ago, Charming Charlie's colorful and wallet-friendly fashions are now sold in its 352 stores. With sales topping $500 million last year, the accessories and apparel retailer opened its first New York City flagship in June, and plans to open 30-plus stores by the end of 2015.

"It's fun and trendy and won't break the bank," HRC's Efros said.

Founder Charlie Chanaratsopon has hinted at plans for an eventual IPO, though no formal announcement has been made.


Source: Ulta

With about 800 stores already in operation, Ulta's plan to open 100 stores annually is expected to help it reach 1,200 locations by 2019. Similar to TJX, the beauty retailer's square footage growth has been complemented by healthy sales trends at its existing stores.

In 2014, Ulta's sales rose more than 21 percent to $3.24 billion.


A Bluemercury store in New York.
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Before Macy's acquired Bluemercury for $210 million this year, the specialty beauty shop had 59 locations. By the end of 2015, its footprint is expected to reach 77.

Although Macy's CFO Karen Hoguet declined to give an exact forecast for the number of Bluemercury shops it can support in the long term, she told investors on the company's most recent earnings call that the potential is "enormous."

"The opportunity to go in the best Macy's stores is huge as well," she said.


Uniqlo store in New York
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Despite opening its first U.S. store about a decade ago, Uniqlo has roughly doubled its American retail count in the past year alone, to about 40 shops. The Japanese brand recently announced locations in Chicago, Denver, Seattle and Washington, D.C.

The brand's design aesthetic, which features basic T-shirts and dresses, is often compared to Gap.


A pedestrian walks by a Francesca's store in New York.
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Same-store sales have fallen at Francesca's for seven of the last nine quarters. But the retailer, which currently operates about 600 boutiques, still plans to ramp up its store base to 900 locations.

It's now under the leadership of former Signet Jewelers CEO Michael Barnes. Analysts have said that improvements in merchandise and a lesser reliance on promotions have shown that trends at the specialty retailer, which grew its sales 11 percent to $95 million in the first quarter, are headed in the right direction.


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Though it's a publicly traded copany, Cabela's has fewer locations than some of the private retailers on this list. With roughly 70 stores in the U.S. and Canada, the retailer has announced plans to add more than a dozen new stores by spring 2017, as it marches toward its goal of 200 domestic stores.

Sales at its existing shops, however, remain under pressure, with Cabela's in the most recent quarter posting a same-store sales decline of 1.3 percent. That decline was mostly weighted toward weakness at its locations in Canada. The retailer has also cited outperformance at its new concept stores, which replicate the outdoors.

Bass Pro Shops

Source: Bass Pro Shop

Fellow outdoor retailer Bass Pro Shops is plotting similar expansion plans. The private company has announced plans for 20 new locations, a significant number of openings compared with its roughly 70 stores currently in operation.

In a recent note, Standard & Poor's credit analyst George Skoufis said he expects new store openings and volume growth to complement a "modest" increase in comparable-store sales this year.

Forbes estimated the retailer's annual sales at $4.2 billion as of October.


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As fast-fashion retailers continue to steal share from their full-price competitors, H&M is keeping its foot on the gas.

The company, which already has about 3,600 stores around the world, will open 400 net new locations this year. Along with its namesake label, this includes growth in its secondary brands including COS and Cheap Monday.


A customer walks with her purchases outside Primark's flagship store on Oxford Street in London.
Getty Images

The industry has been anxiously awaiting the entry of Irish retailer Primark into the U.S. That's because its prices undercut even the cheapest fast-fashion names.

Analysts have cautioned that Primark's U.S. debut—it will open its first American store this year, and has leased space in seven Sears locations—will cause further deflation in the overall apparel industry.

"Those retailers with existing deflationary momentum and/or fashion miss spirals could be most vulnerable," Cowen & Co. analyst Oliver Chen wrote in a note to investors earlier this year.