The retail small caps that weathered the COVID storm better than their peers

While retail spending figures slumped in April, some ASX small caps fared better than others because of their focus and location.

Overall the retail sector made a modest 3 per cent gain but there is a big divergence between the winners and the losers.

Code	Name	Price (I)	1Y Tot Ret	1M Tot Ret	Market Cap
TRS	REJECT SHOP LTD/THE	7.32	285	44	$273.6M
MTO	MOTORCYCLE HOLDINGS LTD	1.85	59	39	$111.7M
ADH	ADAIRS LTD	2.24	67	29	$383.8M
BLX	BEACON LIGHTING GROUP LTD	1.08	6	26	$243.7M
JYC	JOYCE CORP LTD	1.2	-19	24	$33.7M
ASG	AUTOSPORTS GROUP LTD	1.12	-9	18	$225.1M
SSG	SHAVER SHOP GROUP LTD	0.695	74	12	$87.3M
CCX	CITY CHIC COLLECTIVE LTD	2.84	68	4	$583.3M
MHJ	MICHAEL HILL INTERNATIONAL L	0.34	-32	3	$129.9M
BBN	BABY BUNTING GROUP LTD	3.35	60	0	$410.8M
SRY	STORY-I LTD	0.012	-25	0	$4.4M
PGR	THE PAS GROUP LTD	0.052	-57	-7	$7.1M
VTG	VITA GROUP LTD	0.985	-23	-8	$159.7M
MOZ	MOSAIC BRANDS LTD	0.725	-72	-9	$71.6M
AU8	AUMAKE INTERNATIONAL LTD	0.054	-58	-12	$17.6M
CCV	CASH CONVERTERS INTL LTD	0.175	9	-20	$107.9M
MPH	MEDILAND PHARM LTD	0.1	-68	-23	$31.3M
MYR	MYER HOLDINGS LTD	0.21	-58	-30	$184.8M
TGA	THORN GROUP LTD	0.089	-67	-34	$28.7M
NCK	NICK SCALI	6.57	7	21	$532.7M

The winners are the ones that focus on high-demand markets that have not been decimated by COVID-19.

Two examples are furniture stores Adairs (ASX:ADH) and Nick Scali (ASX:NCK), which are up 29 per cent and 21 per cent, respectively, in the last month.

Last week both stocks upped their guidance and credited the increase in sales to locked-down Australians having more time to do home projects.

Other winners include personal care store Shaver Shop (ASX:SSG) and one-stop baby shop Baby Bunting (ASX:BBN).

On the other hand, Myer (ASX:MYR) has been a major loser, continuing to fall in June.

Another couple of losers are daigou-focused stocks AuMake (ASX:AU8) and Mediland Pharm (ASX:MPH), with the pair only able to interact with their clientele online with Australia’s borders closed to tourists.

Spending will vary, even between states

Although some individual companies have performed better than others, the overall picture is mixed.

The Commonwealth Bank reported last week spending surged in March as consumers splurged on lockdown items such as toilet paper.

This slumped in April as lockdowns hit hard, but by May spending had recovered to normal levels.

The bank also noted there was a great divergence between the states, with Victoria and New South Wales experiencing higher COVID-19 cases and being harder hit than other states.

For example, New South Wales saw a drop of 1 per cent over the year to the end of the March quarter, while Queensland witnessed a 1 per cent gain over the same period.

“This isn’t surprising as these states are most exposed to services and are feeling the brunt of the drop-off in foreign tourists and lower foreign student numbers,” economist Kristina Clifton said.

“Spending is faring better in QLD, SA and WA.”

Clifton also warned that a reintroduction of restrictions in Victoria would further dampen the recovery compared to other states.