The Misfits: Oxford Industries (OXM)
Remaining a market-beating stock while completing a corporate transformation is truly spectacular.
It takes a rare breed of a company to be exceptional at multiple things. More often than not, a company is spectacular at one thing and mediocre at other things it pursues down the road. What is even less frequent than a company that can excel in multiple businesses is one that completely transforms its business.
Perhaps the most well-known example of a business that remakes itself was when Netflix went from mail-order DVD rentals to streaming. As much as it seems like it was a no-brainer decision, it was a hotly debated subject at the time. The DVD rental business was a cash cow and a much more profitable business. If you don’t believe me, look at the free cash flow yields before it launched its streaming service in 2007.
It hasn’t garnered nearly as much attention, but the transition Oxford Industries (NYSE: OXM) has made over the past 20 years is equally impressive. The once incredibly profitable textile manufacturer transitioned to the owner and marketer of multiple clothing brands. The fact that it managed that transition and remained a market-beating stock deftly is truly stunning.
Let’s dig into Oxford Industries and see how it remained relevant long after its original business dwindled and how it impressively harnesses Tommy Bahama, one of the more unique clothing lines out there.
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