Aren't IPO and Discretionary Retail meant to be dirty words on The ASX

Aren't IPO and Discretionary Retail meant to be dirty words on The ASX? Apparently not for investors in yesterday's float of jewellery retailer Lovisa which delivered investors with a healthy 7% stag. Perhaps established retailers can learn a trick or two from this nimble operator. 1) Lovisa moves quickly on celebrity jewellery trends. Effectively when a big name celebrity is pictured wearing a designer piece of jewellery Lovisa is able to have the product manufactured and in store within weeks - customers can access what is hot. 2) Product is made in China and they have great control over their supply chain. This means cost of goods is low, products reach consumers in a timely fashion and the model means there is limited inventory that needs to be held. 3) The stores sit in high traffic centres like Westfield. However, they have a relatively small store footprint which helps to contain rents and further assists with their margins. The market response yesterday suggests all is not doomed for the savvy discretionary retailer.


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