A Sneaker Maker Is 2024’s Top Brand To Watch

A little break from our focus on retirement and all things associated with that long-term investing goal to look at something in the here and now. 2024’s emerging brands. 

From time to time, we like to check in with Placer.ai. They’ve been doing analysis with artificial intelligence long before it became an ubiquitous thing. And they just released their list of the ten brands to watch in 2024, based on location intelligence and consumer demographic insights. 

Here are the names that made the list, followed by a look at a few that have some sort of investment possibility attached or adjacent to them. 

1. New Balance
2. Harbor Freight Tools
3. Winmark
4. HomeGoods
5. Bealls
6. Ollie’s Bargain Outlet
7. Trader Joe’s
8. Foxtrot Market
9. Jersey Mike’s
10. Playa Bowl

So, yeah, the #1 brand to keep an eye on in 2024 is privately-owned New Balance. You can’t buy the stock. Of course, the dominant name in the space is the footwear & accessories stock investors have been searching for most in our Trackstar database, Nike (NKE). 

Our sister newsletter, The Spill, recently looked at Nike, noting the interest among investors, particularly financial professionals, but gave the stock a sour 5 out of 10 rating:

While Nike’s brand is well-known worldwide, we question its ability to deliver on its lofty cost-savings goals.

Competition is fierce, with many apparel companies struggling.

We can’t justify an investment in Nike when it’s this expensive and would look elsewhere for better opportunities.

The Juice agrees. We wouldn’t touch the space, even if New Balance was publicly traded. 

Winmark Corp (WINA), the #3 emerging brand on Placer.ai’s list, is publicly traded. Over the last year, the stock has returned roughly 36%. While it has come back a bit to start 2024, it had a tough go at the end of 2023 after reaching 52-week highs in mid-December. 

Winmark used to be Play It Again Sports. Now, Play It Again is one of the company’s brands focused on selling used goods, which also include Music Go Round, Once Upon a Child, Plato’s Closet and Style Encore.

Here’s what Placer.ai has to say about Winmark:

The median household income (HHI) in the trade areas of Winmark’s apparel chains tends to be lower than the median HHI in the wider apparel category – so budget-conscious consumers are driving at least some of the company’s growth. With more consumers looking for ways to cut back on spending in 2024, the demand for second-hand clothes is expected to grow even further – and Winmark is likely to continue reaping the benefits.

This actually ties into The Juice’s old theory around the have and have nots economy, which helped drive the 2020-to-2022 success of the discount dollar stores. 

At this point, we’re not so bullish on the discount sector. We think the people who were hurting then are hurting even more now. They’re the ones deep in credit card debt. While foot traffic — which is a big metric Placer.ai uses — might be up, we’re not so sure it will translate into revenue. This consumer might be skimping more than ever in 2024. 

Similar story for #4 HomeGoods, which is owned by discounting giant TJX Companies (TJX) of TJ Maxx and Marshalls’ fame. HomeGoods, as its name implies, sells home furnishings. For the same reasons we expressed with Winmark, we’re not super bullish on sales at HomeGoods, however people need clothes. And TJ Maxx and Marshalls have them for cheap. So we’d take a look at TJX. Over the last year, the stock is up about 22%. 

Ollie’s Bargain Outlet Holdings (OLLI) is #6 on the list. The company’s stock is up approximately 38% over the last year. Ollie’s is also a discounter in the clothing space. 

According to Placer.ai:

The chain saw a 13.0% YoY increase in visits in 2023, thanks in part to its popularity among a wide array of budget-conscious consumers. Ollie’s has found success with rural shoppers while maintaining its appeal among value-oriented suburban segments – and the chain’s diverse audience base seems to be setting it apart from other discount retailers.

Compelling, but probably too much of a fringe play in a world with so many relatively obvious big-name stocks and ETFs. 

As for the rest of the names, all private. Including a company we’d love a crack at if they were public, everyone’s favorite, Trader Joe’s. You either have one and love it or wish you had one. 

The Bottom Line: Foot traffic and demographic analyses are important and potentially insightful metrics to use when considering stocks. When Placer.ai reports something interesting, we like to pass it along. However, the data doesn’t always scream investment, even if it’s positive. As we always do in The Juice, we’ll relay their data and then make sense of it from an investment perspective.  

We’re taking Monday off because the stock market’s closed. But we’ll focus on ETFs and retirement investing in next week’s short holiday week for Wall Street.

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