Dis-Chem and Clicks remain attractive
Clicks and Dis-Chem shares buck the trend to close near their record highs — and not necessarily because of genetic imperatives
While the general retailers’ index has sunk 27% from its April 2015 peak, two shares in the sector appear to be proving the so-called "lipstick theory". Clicks’s shares closed at R145, a whisker from their record of R145.64, taking gains since the start of the year to 23%. Dis-Chem ended the session at R28.10, just below its June 14 record close of R28.94. Dis-Chem stock has gained 26% year to date even as consumer confidence, according to the latest data from the Bureau for Economic Research, suffers its worst run since 1982. The lipstick effect was coined by Leonard Lauder, chairman of cosmetics empire Estée Lauder, who found that during times of economic stress, sales of his lipsticks rose. The premise is that consumers who aren’t able, or confident enough, to splash out on a big ticket item will comfort themselves with smaller luxuries. But there may be a deeper reason behind it, too. A 2015 Psychology Today report cited a series of experiments that found "while tougher economic...
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