NEW YORK — Retailing is never easy, but the last five years of boom, bust, recovery and consolidation have buffeted companies’ operations and tested managements’ talents perhaps as never before.

Of course, that just makes WWD’s Power Rankings all the more compelling. Broken up into the specialty and broadlines channels, the power rankings represent the average of eight subsidiary five-year averages, selected for their assessment of companies’ relative profitability, efficiency, top- and bottom-line growth and management effectiveness.

The resulting average, dubbed the “power metric,” is a self-weighted figure grading a company’s overall performance through one of the toughest times in retailing memory. And although it may be true that past performance is no guarantee of future results, investors would do well to know where a company’s been rather than bet on the future blind.

Among the specialty stores, it comes as no surprise that Chico’s ran away with the top spot. The company that doesn’t comp negative posted stunning results by every measure. Average gross margin for the past five years stands at almost 60 percent in an industry where 35 percent is considered pretty good. But not only is Chico’s strong at fashion and inventory management — and thus lots of full-price selling — it’s also enviably adept at controlling costs, translating a fat 11.54 percent of its sales into profits.

As well as Chico’s has performed, however, as a retail concept the winner hands down is the mall-based teen category. Fully half of the top 10— Aeropostale, Hot Topic, Abercrombie & Fitch, PacSun and American Eagle Outfitters — cater to younger consumers, a wise proposition given the sales growth and high margins afforded in that segment.

In the broadlines category, it’s clear the middle ground is the hardest to hold. Led by off-pricers and discounters at the top and luxury players at the bottom, only Sears and Bon-Ton could crack the top 10 as moderate department store operators.

TJX and Ross Stores grabbed the top spots with strength throughout their businesses, but especially by delivering outstanding returns on shareholder equity. And of course the usual suspects Wal-Mart, Target and Kohl’s made the list.But given the tectonic shifts occurring in the broadlines world right now, it bears watching to see how the rankings will hold up going forward. J.C. Penney is a behemoth just emerging from a prolonged turnaround phase, and the obituary for the overall department store channel was clearly written too soon. Kohl’s, after almost 10 years of heated sales growth, has stumbled of late, and luxury retailers are riding the incipient economic recovery to all-time highs. Wal-Mart and Target, standing in the middle of the power rankings pack, are likely rooted there for some time. Above and below them, it’s a grand prix.

POWER RANKINGS
Fashion’s Top-Performing Retailers
 
NET PROFIT MARGIN
OPERATING MARGIN
GROSS MARGIN

SALES GROWTH RATE

EPS
GROWTH RATE
RETURN ON ASSETS
RETURN ON EQUITY
RETURN ON INVESTMENT CAP
POWER METRIC
 
TOP 10 SPECIALTY STORES
 
 
 
 
 
 
 
 
 
1. Chico's FAS Inc.
11.54
18.47
59.64
48.41
57.05
27.44
29.32
27.29
34.9
2. Christopher & Banks Corp.
9.83
15.98
41.2
28.82
43.04
25.59
29.86
27
27.67
3. Aeropostale Inc.
6.22
10.52
30.95
36.96
57.19
15.34
41.94
17.78
27.11
4. Hot Topic Inc.
8.35
12.87
38.88
40.8
48.32
19.92
21.52
21.08
26.47
5. Abercrombie & Fitch Co.
12.75
20.53
41.97
16.23
16.47
26.87
32.68
31.64
24.89
6. Mothers Work Inc.
1.72
6.93
51.46
10.49
44.36
3.53
29.17
4.18
18.98
7. Bebe Stores Inc.
9.99
15.44
48.14
17.13
0.37
19.32
20.88
20.03
18.91
8. Pacific Sunwear of California Inc.
6.49
10.43
33.81
26.5
25.71
14.88
17.34
15.9
18.88
9. American Eagle Outfitters Inc.
7.43
12
39.23
20.94
2.02
18.06
21.1
20.23
17.63
10. Talbots Inc.
6.73
11.13
39.17
7.01
25.79
12.83
19.02
15.16
17.11
AVERAGE
8.11
13.43
42.45
25.33
32.03
18.38
26.28
20.03
23.26
 
TOP 10 BROADLINES RETAILERS
 
 
 
 
 
 
 
 
 
1. TJX Cos. Inc.
5.2
8.74
24.58
10.89
14.69
16.8
42.31
27.04
18.78
2. Ross Stores Inc.
5.68
9.37
28.74
12.43
16.03
15.79
30.83
26.52
18.17
3. Kohl's Corp.
6.23
10.74
33.92
22.8
23.82
10.69
16.48
11.58
17.03
4. Sears, Roebuck & Co.
4.04
7.37
35.63
0.58
34.09
4.19
25.31
6.85
14.76
5. Wal-Mart Stores Inc.
3.25
5.77
22.37
13.19
15.45
8.76
20.22
11.63
12.58
6. Target Corp.
3.57
7.02
32.44
9.45
14.47
6.51
18.09
8.38
12.49
7. Neiman Marcus Group Inc.
3.76
7.08
32.96
5.79
4.13
6.31
11.88
8.33
10.03
8. Saks Inc.
1.18
4.11
36.55
0.3
27.67
1.5
3.3
1.8
9.55
9. Nordstrom Inc.
2.65
3.73
34.04
5.15
4.6
4.15
11.26
5.32
8.86
10. Bon-Ton Stores Inc.
1.36
3.43
36.85
6.55
10.5
2.5
5.01
3.21
8.68
AVERAGE
3.69
6.74
31.81
8.71
16.55
7.72
18.47
11.07
13.09
FIGURES IN PERCENT. POWER METRICS REPRESENT THE AVERAGES OF THE OTHER METRICS. METRICS REPRESENT AVERAGES OF LAST FIVE FULL FISCAL YEARS, EXCEPT SALES AND EPS GROWTH, WHICH REPRESENT FIVE-YEAR GROWTH RATES. ROA, ROE & ROIC ARE AFTERTAX FIGURES. CALCULATIONS BY WWD. SOURCE: COMPANY REPORTS, EDGARPRO, REUTERS RESEARCH.

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