It takes more than a high-quality product to make a great stock. Don't believe me? Let's take a quick look at four notable retail companies whose success -- or failure -- owes to more than just their merchandise.
Given its gloomy, Gothy image, you might think Hot Topic
Hot Topic isn't about style in the true designer's sense of the word. Indeed, the company's own name makes its mission clear: It sells you the hot branded products of the moment. After a while, though, you'll wonder why you have 10 nearly identical T-shirts, differing only in the logos they display. Investors who got in early rode the stock to a 10-bagger, because Hot Topic was fairly novel when it first appeared. But since the 2004 top, shareholders have been hurting.
For a long time, Gap
True, a five-year Timberland chart shows a 55% decline. But if you look at the longer term, you'll see it's performed quite well since 1992. Much of its five-year decline has come since the economy went south in 2007. I'd also suggest that going forward, Timberland's distinctive, ever-developing, and well-focused product line gives the company a far better chance of reaching its old highs than the rivals I've mentioned above.
Fool contributor Rick Steier has no positions in any stocks mentioned, other than an old set of Timberlands he wears when it snows. The Fool's disclosure policy is loved by investors and fashionistas alike.