A number of things are lining up in favor of luxury retailers, analyst Dana Telsey told CNBC on Friday.
Specifically, the expectation of tax cuts, a rising stock market and the continued increase of global wealth are all bullish for the sector, she said in an interview with “Closing Bell.”
“We’ve got product innovation, scarcity in terms of products out there, and I think as consumers get wealthier, there’s more that they can spend on luxury goods,” noted Telsey, CEO of Telsey Advisory Group
Luxury retailers have seen moves higher lately, with Michael Kors up more than 2 percent this week after it was rated a buy in new coverage at Needham.
Shares of Tiffany & Co also jumped last week after Citigroup upgraded the jeweler to a buy. The stock has gained almost 10 percent in a month. Telsey believes that good fortune can carry over across the luxury sector.
“We can see an uplift that carries everyone. A rising tide helps all luxury goods companies.”
And while luxury retailers have been focused more on the store experience, they are adapting to the times and beginning to invest in their presence online, she said.
However, Brian Nagel, senior retail analyst at Oppenheimer, thinks the increase in consumer spending will be more of a benefit to discount retailers.
He specifically likes Walmart, which has taken the lead in the digital arena.
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