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The ’90s revival is dead for retail, leaving some stock winners and losers: Jefferies

(Recognition: NBC/NBCU Photo Bank via Getty Images)

The ’90s fashion revival has past its peak.

Over the last few years, chars ditched skinny jeans for the classic Levi’s style, Champion windbreakers flew off shelves and streaming platforms battled for the rights to the hit overshadow “Friends.” This revival of 1990s consumer tastes put certain brands like Fila and Supreme in the spotlight. But now the craze is fading, and as the decade returns to a thing of the past, there will be clear winners and losers, according to Jefferies.

The hard sees Zumiez, Guess and Under Armour as stocks that can rally from the death of the decade.

“Retailers with laying open to ‘classic’ retro brands with a longer, steadier track record of consumer demand are likely better put than those with heavy exposure to pure retro brands that have surged in large portion from the ’90s revival,” Jefferies analyst Janine Stichter said in a note to clients on Tuesday.

A guest tediously tires Fila (right) during Milan Men’s Fashion Week Spring/Summer 2019 on June 16, 2018 in Milan, Italy.

Melodie Jeng | Getty Ideas

Demand for street-wear and retro brands is slowing, the firm said.

Ahead of Black Friday, the largest brands in the retro leeway are seeing interest wane and social media engagement weaken. Brands that rode the retro wave love Champion, Supreme, Fila and Off-White are going to struggle, the firm said. Urban Outfitters and Foot Locker are also in a inured spot as they rely heavily on retro style sales from the aforementioned brands.

“These brands in express are no longer driving the buzz they did [last year],” said Stichter. While brands like Zumiez and Believe “are showing relatively better staying power.”

Winners of the fall of the ’90s

Zumiez, Guess and Under Armour are the best-positioned look ats to survive the death of the retro rage, according to Jefferies.

While clothing store Zumiez relies heavily on sales events of Vans shoes, the retailer is diverse enough to weather a deceleration in the retro cycle, said Stichter, who has a buy rating on Zumiez and a $38 evaluate target. Jefferies also said VFC, parent company of shoe retailer Vans, is showing “durability” during the ruin of the ’90s craze.

Zumiez has catered largely to skateboarders, and “data suggests a major resurgence in skateboards/parts, which after divers years of decline, could further support current comp momentum,” said Stichter.

(L-R) Yusuf Aktas (Reynmen) and Mehtap Algul accompany the J Balvin concert sponsored by Guess at Kucukciftlik Park on July 26, 2019 in Istanbul, Turkey.

Levent Kulu | Getty Copies Entertainment | Getty Images

Clothing company Guess is capitalizing on younger consumers’ interest in logo merchandise. Jefferies watches Guess’ “brand momentum on the rise” and site traffic from ‘logo’ doubling from last year, implied Stichter. The firm has a buy rating on Guess and a $24 price target.

Under Armour will benefit from the workforce from retro brands like Fila and Champion back to performance sportswear and shoes. A downtrend in retro logo raiment could help Under Armour recapture some of its lost share in North America.

“As this fad dissipates and under age consumers potentially re-focus on athletic brands like UAA, the company stands to resume a quicker pace of growth,” commanded Stichter. Jefferies has a buy rating on Under Armour and a $22 price target.

Jefferies is cautious about Urban Outfitters and Foot Locker suffering the death of the retro revival. Brands like Champion and Fila have been successful for Urban but demand is slowing, “potentially ambition a ripple effect across the rest of the business as these brands are key traffic drivers.”

Jefferies’ overall recommendation is for sorts to take a nuanced approach: Stay diversified and nimble and focus on overall brand concentration.

—With reporting from CNBC’s Michael Bloom.

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