2013 was somewhat of a mixed bag, economically speaking. Though it was a poor year for retail, the U.S. unemployment rate lowered, falling to 7.2 percent, the lowest rate the job market has seen in the past five years, yet still historically high overall.The stock market had a remarkably great year, with The S&P 500 gaining more than 22 percent through mid-December. The Federal Government deemed the economy healthy enough to get by with less financial support and cut back their bond-buying program. Congress also reached their two-year budget deal, adding more stability to the economy.
However, 2013 didn’t entirely reflect progress, with one major U.S. city filing for bankruptcy and a 16-day federal government shutdown that threatened to cause the United States to go into default. Economists estimate that the government shutdown took $24 billion from the economy, a cost that slowed economic growth for the last quarter of 2013.
Many signs indicate that the economy is slowly recalibrating, and a few specific retailers and stocks are expected to rise in 2014 — some with a demonstrated track record for success along with those that struggled. Here are the entities you should keep an eye out for this year:
If you asked investors and financial experts for their outlook on Best Buy in 2012 and 2013, they would have said Best Buy was a dying electronics superstore on its last legs. However, Best Buy, under new management, somehow managed to beat predictions and performed as the No. 2 performing stock in the S&P 500 in 2013, as well as successfully adjust their business model and begin gaining profit once more.
A year earlier Best Buy had been hit hard by the “showrooming phenomenon,” a movement by shoppers to check out products in-store but order online for a better price, such as at Amazon.com. Determined, Best Buy overcame rumors that they were headed for the same fate as Circuit City, by rededicating themselves to improve their stores, markdown areas, interactive sections, and item placement focused on motivating impulse buys, as well as price-matching.
Best Buy’s stock dramatically increased at a percentage rate of 255 percent following three years of losing, posting $41.61 in late December 2013.
Yahoo Finance rated J.C. Penney Co. the worst performer of the entire S&P 500, with shares at $7, following a bumpy year with a 52-week range between $6.24 to $25.78. In May 2013, the American store released an apology video, begging their customers’ forgiveness for the year and a half under newly appointed CEO Ron Johnson, which alienated customers and cost the brand $4.3 billion in sales.
CEO Johnson, who was known for his success in making Target stylish and turning Apple stores into a mega brand, missed the mark when he became CEO of JC Penney. His strategy stripped the retailer of the very components that customers gravitated to the most. Gone were the coupons and sales from JC Penney, in favor of repriced items that were “fair and square,” replacing what Johnson called “fake prices” that may have been higher, but marked down with discounts. He also lost the main core of JC Penney’s loyal customers, who were older and felt they no longer fit in anymore.
After firing Johnson, JC Penney rehired their former CEO Myron Ullmann, and as of February 27, 2014, their shares jumped 25 percent, the company’s largest percentage gain in the past three decades.
Yoga apparel maker Lululemon recalled 17 percent of their signature pants from stores due to sheerness problems with the material, a blunder that cost the company more than $67 million in annual revenue. Additionally, the company lost approximately 20 percent of shares in 2013 which stemmed from leadership mistakes. Its founder, Chip Wilson, made a controversial comment in June that not all women’s bodies work well in yoga pants.
So why should we have reason to hope Lululemon will come raring back this year? The company has a new CEO on board now, Laurent Potdevin, who hails from philanthropic shoe company Toms. Potdevin was responsible for the exponential growth of Toms from a one-man business to a company that has donated 10 million pairs of shoes, without the aid of investors or an advertising fund.
Lululemon has also placed new leadership in their logistics and sourcing divisions. These changes are expected to create a positive 2014 comeback story for the troubled athletic-wear brand.
According to MSN Money, Tesla’s projected 2014 earning sales growth is a whopping 606 percent, with a projected sales growth of 29 percent. Tesla Motors, a niche electric car maker, was initially given a lukewarm reception by skeptics that questioned whether the company had enough potential to become a successful business. However, 2013 saw the car company took the auto industry by storm, winning the Motor Trend Car of the Year award for 2013. According to its billionaire founder Elon Musk, sales of its latest model surpassed 4,750 units for the second quarter of 2013, exceeding projections by critics.
As of February 20, 2014, its shares rose to a record level of 10 percent, and as of February 26, climbed more than 30 percent. Investors are now projecting that Tesla will transform the auto industry, and will grow to compete with Toyota, Ford, and General Motors.