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Digging deeper into The Buckle results

For several months, I’ve been writing about how The Buckle is outperforming its retail competitors.

At a time when so many retailers are posting weak results, The Buckle has been posting same-store sales increases in the 20s. The company also had a great holiday season even with the economy sputtering.

In an attempt to decipher what The Buckle is doing that others aren’t, I asked Liz Pierce, senior research associate at Roth Capital Partners in Newport Beach to walk the store with me.

Liz has researched retail stocks on the sell side since 1994. She spends a lot of time in shopping centers and knows all the retail players. She used to cover the The Buckle, but does not now.

By the way, we weren’t the only ones with this idea. While we were in The Buckle, Liz thought she recognized an investor checking out the store.

“With the results they’ve had, I’m sure everybody is shopping them,” she said.

Here are Liz’s thoughts after our tour of The Buckle at Irvine Spectrum, the only Buckle store in Orange County.

Locations: For years, The Buckle was the only player in small, Midwestern towns. With viral marketing and the influence of the internet, young people in those towns are very aware of these brands. That could be helping The Buckle.

Windows: Very tight, very focused. “I immediately get denim.” They also have footwear and accessories in the window at a time when others are dropping those categories. With the guys offering in the window, it’s very age neutral. Any age could wear those clothes.

Inside the store: The store is very easy to shop. The aisles are wide, the store is clean and bright. There are lots of “faceouts” – where instead of clothing hanging sideways on a rack the clothes faceout into the store offering a front view of the item. Faceouts are an effective way to showcase clothes but they take a lot of room.

Guys: The shorts, sandals and tops were next to each other, making it easy for a guy to pull together an outfit.

Women: The Buckle is leading with fashion, not basics. The walls were filled with colorful clothing, there were a lot of screen T-shirts and patterned wovens. The store was filled with cute fashion tops. “It would be hard not to find at least one to buy.” The Buckle offers a diversified assortment. Other competitors at the mall offer a more edited collection. This store would appeal to a more confident person who was comfortable making their own fashion choices rather than an unsure teen just starting to care about clothes who needs a store to direct them.

Denim: A big driver for the company, and with price points from $60 to $140, it is an easier entry point than many premium brands.

Mom and daughter: The company has said that a wider age range is shopping at The Buckle, and Liz can see why. “I’m not the target customer, but it was still appealing to me. The denim is not so juvenile. It’s merchandised well where it’s easy to create outfits.”

Service: When Liz covered The Buckle, it was known for service. Sales associates know the product and know how to sell it. The store still offers layaway and free gift wrapping. When we visited, the store manager was very open and friendly and was happy to talk about how the store works. “How welcome did you feel in there?” Liz said “You just wanted to spend money.”