This story appears in the April 30, 2018 issue of Forbes.
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The Murrays of Vineyard Vines
Privately held Vineyard Vines is the subject of an entrepreneurial tale in the April 30 issue of Forbes. What does its success tell investors about the public market for apparel manufacturers and apparel vendors? It might remind us that any business going from cold to hot overnight could just as easily go the other way. Such fashionable outfits as Abercrombie & Fitch, the Limited and Wet Seal were once hot and then not so hot.
If you must invest in something stylish, go for a blue chip like Ralph Lauren (RL) rather than a fast grower like Lululemon Athletica (LULU). Lauren has shrunk its footprint recently, but it’s still a solid business; its enterprise value (market capitalization plus debt minus cash) is an affordable 8 times earnings before depreciation, interest and taxes. Lulu’s multiple is 19.
By that same measure of enterprise multiple, Perry Ellis International (PERY) and Michael Kors Holdings (KORS) are comparatively cheap at 10 and 8 times, respectively. Under Armour (UA) gets a lululike multiple of 21.
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The Murrays of Vineyard Vines
Privately held Vineyard Vines is the subject of an entrepreneurial tale in the April 30 issue of Forbes. What does its success tell investors about the public market for apparel manufacturers and apparel vendors? It might remind us that any business going from cold to hot overnight could just as easily go the other way. Such fashionable outfits as Abercrombie & Fitch, the Limited and Wet Seal were once hot and then not so hot.
If you must invest in something stylish, go for a blue chip like Ralph Lauren (RL) rather than a fast grower like Lululemon Athletica (LULU). Lauren has shrunk its footprint recently, but it’s still a solid business; its enterprise value (market capitalization plus debt minus cash) is an affordable 8 times earnings before depreciation, interest and taxes. Lulu’s multiple is 19.
By that same measure of enterprise multiple, Perry Ellis International (PERY) and Michael Kors Holdings (KORS) are comparatively cheap at 10 and 8 times, respectively. Under Armour (UA) gets a lululike multiple of 21.
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