Retailers specializing in off-price merchandise are positioned to take advantage of prevailing trends as investors shun fashion risk and look for quality, Cowen & Co.'s Oliver Chen said Monday.
Luxury and premium retailers Coach, Michael Kors and Ralph Lauren have recently fallen to multi-year lows. Meanwhile, Costco and TJX Cos. are both up more than 25 percent in the past year.
"What's great about TJ is they're already market share leaders in Europe, and being off price is a globally appealing kind of phenomenon," Cowen's senior retail analyst told CNBC's "Squawk on the Street."
"If you think about the consumer for back to school and fall, it's all about promotions. It's all about getting discounts on national brands. So that's a key theme which is about the new normal, the new consumer."
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Consumers no longer dress from head to toe in branded uniforms, and stores like T.J. Maxx give shoppers the thrill of a "treasure hunt," he said.
Consumption patterns in China is creating another headwind for luxury brands as the country's politicians crack down on gift-giving among officials and materialism in the wider society softens, he said.
Retailers such as Tiffany are still capturing Chinese tourist dollars in Europe, Chen said, but across the pond, a decline in European tourist flows into the United States is offsetting gains from China traffic.
As for the once-hot handbag market, Cowen sees trouble ahead as consumers allocate more spending to athletic leisurewear and wearables, and as designers fail to produce a new "it" bag, he said.
With that in mind, Chen recommends globally exposed brands that embrace quality and value, including athletic companies, Costco, TJ Brands and L Brands.
"I think it comes back to brands, global, strong brands with long-term paths," he said.