Competition

I have an alternate view on Lovisa’s moat/competitive advantage. I’m not convinced starting a competitor would be easy for the following reasons.

• Their secret sauce is the product development team, who have an ability to consistently release on trend accessories at a staggering pace, this is not an easy thing to do.
• Their stock turn is well managed, dogs are sold off promptly. Quick manufacturing and airfreight, allows best sellers to be topped up. Following on from this, a best seller can be updated into a new version to keep the store fresh but still hitting key sales points.
• Their sales data for the past 10 plus years is a clear advantage in analysing, best product categories, price points, sales cycles, key market differences, metro v regional, EU v Aus etc.
• Brand recognition takes time to develop. Lovisa has a well-established store and online presence.

So yes, you could attempt to replicate the above and, on the surface, it is doable.  However, it would take deep pockets and a lot of $’s thrown at marketing. To my mind, the intangibles of product development and consumer love are not so easy to replicate.

I have held in the past and it is on my watchlist, due to the issues well outlined in @Rickpost. However as Rick notes, with retail so out of favour it could be time to relook at the business and a possible entry point.