Comments on: Mothers Work Price Will Rebound as Fashion Trend Ends

By: Blogvesting » MWRK : A value trap?

Blogvesting » MWRK : A value trap? — Sat, 31 May 2008 22:54:32 +0000

[...] came across MWRK while reading this post at Fat Pitch Financials. I was intrigued by the thesis that MWRK could be falling below intrinsic [...]

By: Fat Pitch Financials 2007 Performance - Fat Pitch Financials

Fat Pitch Financials 2007 Performance - Fat Pitch Financials — Thu, 10 Jan 2008 05:31:49 +0000

[...] went on to buy shares in Mothers Work (MWRK) in the summer. On July 26th, I added 4,080 shares for $24.31. Mothers Work shares then [...]

By: Mothers Work a Value Trap? Not Likely - Fat Pitch Financials

Mothers Work a Value Trap? Not Likely - Fat Pitch Financials — Fri, 31 Aug 2007 18:43:50 +0000

[...] really caught my attention was that the post by Blogvesting discusses and directly links to my analysis of Mothers Work. I love it that another blogger is challenging my stock analysis. The debate helps me to focus on [...]

By: George

George — Fri, 24 Aug 2007 04:06:42 +0000

Hi John,
Mothers Work’s sales are declining because ordinary clothing stores are selling non-maternity clothing that can basically be used by women in the first trimester of their pregnancies because the current fashion trend includes oversized and high waisted shirts and dresses. Before this fashion trend, pregnant women had to buy maternity clothes at Mothers Work stores, since mainstream clothing would not fit pregnant women. I expect that like most fashion trends, this current forgivingly large fashion trend will end soon. The Washington Post article I cited above indicates that this trend might be ending soon and tighter styles might be coming into vogue. I believe Mothers Work sales will return to their past growth trend within a year or two.

By: john

john — Fri, 24 Aug 2007 01:25:50 +0000

Interesting post. Maybe I just read it too quickly but I didn’t follow you reasoning for why a) Mother’s Works sales are currently declining and b) you expect them to rebound.

Again, I am sure this is purely my own confusion just trying to sort things out. If maternity styles are coming into vogue then shouldn’t that be increasing Mother’s sales?

By: Fully Stocked

Fully Stocked — Mon, 20 Aug 2007 08:46:49 +0000

Festival of Stocks – August 20, 2007 Edition…

As a newbie in the finance blog arena, it’s nice to get to know others and get different perspectives on money topics….

By: George

George — Fri, 17 Aug 2007 15:27:46 +0000

Great insights Diego. I appreciate your comments on the fashion industry and in particular the empire-waist trend. I hope it doesn’t take three more years for this trend to work itself out.

Since Mothers Work’s valuation is pretty reasonable, I should still be okay with this one. What Mothers Work really needs to do is expand into the Asian and European markets. Even better, I’d like to see them export their high end store brand, A Pea in the Pod, to a high growth developing country like Brazil.

Finally, it would be interesting to see if Mothers Work could develop another brand to bring fashion to the increasingly overweight U.S. market. I hear rumors that some women fall in love with their comfortable pregnancy pants and continue to wear them well past their pregnancy.

Hopefully, Mothers Work will be able to hold it together until this fashion trend changes. In the mean time, I should also look at H&M more closely. A local value investor I know bought share in that company a few years ago and I noticed an H&M open up at a local mall. Forever 21 is a completely new name to me. It might also be worth a look, but I tend to stay away from pure run of the mill fashion retailers when investing. Maybe they too have some unique competitive advantage?

By: Diego Gomez

Diego Gomez — Fri, 17 Aug 2007 14:57:26 +0000

I can’t comment on the valuation aspects of this post, but as far as the fashion, you’ve overlooked the diffusion timeline: the window between runway and retail.

Fast-fashion retailers like H&M and Forever 21 are working overtime to close the window between runway and retail, but by and large a silhouette trend (as opposed to, say, a color or piece trend) like the one you found – empire waists – takes several *years* to fully diffuse *into* the marketplace, and that means that it will take years for the next trend to diffuse in and replace it.

For example, the generally accepted harbinger of the empire waist trend was the dior gown that gisele bundchen wore to the 2005 oscars 30 months ago.

Falling out of fashion will take even longer. The Washington Post may say that wasp-waists are going to be all over the spring 08 runways (confusingly presented in fall 07), and they likely will be (along with a herald of the “return of the suit” or something equally inane), but not only will a corseted look take its own appropriate 30 or so months to fully diffuse, BUT it won’t go over as well with consumers, because we are a fat country and empire waists and swing dresses hide a multitude of sins (or at least recontextualize them as gestation). :) I would say that the empire-waist trend has at least 3 more years of steam, and then an additional 3-5 of gradual petering out. In ALL that time, pregnant women will be able to buy maternity-suitable non-maternity wear.