Business has been tough for US retailers, resulting in weak performance across the sector. However, excessive selling off in the sector has provided some opportunities for investors to gain exposure to attractively-valued companies with effective strategies for adapting to change. Mitch Reznick, Co-head of Credit, and Ilana Elbim, Credit Analyst, select L Brands, home of Victoria’s Secret, as an attractive opportunity in the US retail space. Challenging conditions: priced in, or leading to overselling? Despite a supportive US economy, with improving macroeconomic data and rising consumer confidence, retailers have suffered. This is primarily due to secular changes in the industry, which include: consumers’ growing preference for experiences instead of clothing, declining tourist numbers (and therefore holiday shoppers), unseasonal weather, and increasing competition from e-commerce pure players such as Amazon.