Grab Your Power Tie: The 1980s Are Back From missile defense systems to preppy fashion--the decade that brought us the Material Girl is here again. Are the stocks in style too?
(FORTUNE Magazine) – Oh, admit it, already--the '80s are back. The signs are everywhere: A Bush is in the White House, and missile defense is on the agenda. Oversized off-the-shoulder fashions are bouncing down the runways, Dungeons & Dragons recently hit the big screen, and preppy grosgrain belts are even gracing the pages of FORTUNE (see Personal Fortune). So, we wondered, are '80s stocks back in vogue too?
The answer? We'll be honest: For every Madonna (that survived), there are more than a few Dexy's Midnight Runners (the one-hit wonder group that delivered "Come on Eileen"). Yes, the company that makes Members Only jackets is still around (it's called Aris Industries, AISI.OB, 44 cents), and yes, it still makes Members Only jackets, but these days the stock is about as popular as Garbage Pail Kids collector cards. Or remember Circuit City (CC, $15)? It was the hottest stock of the 1980s, rising 9,287% during the decade. Then it ran out of steam. Indeed, today's landscape is littered with enough '80s has-beens to fill a Behind the Music marathon: Companies like Candie's, Hasbro, and even Gap--though still breathing--have all fallen on hard times lately. "Think of companies that were big in the '80s" says Mark Greenberg, manager of the Invesco Leisure fund. "Commodore, Atari--they're so dead and buried that kids today wouldn't even recognize those names."
That said, there are a smattering of '80s names that are not only still around but riding the revival with style. Start with Vans (VANS, $21). You remember: 1982. Fast Times at Ridgemont High. Sean Penn donned a pair of the slip-on checkered sneaks for his role as a skateboard-toting stoner, and sales of the shoes exploded. Well, they're back--Vans gear is a huge hit, not just with skateboarders, surfers, and stoners this time but with snowboarders as well (okay, so there's some overlap there). The kids picked up $273 million of Vans merchandise last year, and the stock is near its 52-week high--up 27% so far in 2001. As for those who lived through the first Vans craze, you can still buy the same shoes Penn wore--the company now calls them Vans Old Schools.
Though less of a cult icon, VF Corp. (VFC, $41) is also thriving. In the '80s, VF squeezed millions of Americans into Lee and Wrangler jeans, and it's still doing so today: One of every four pairs of jeans sold in America is a VF brand. The company has recently gone shopping, snatching up other '80s names like Chic and Gitano, along with '90s brands like North Face and JanSport. The strategy is paying off: In a year that has punished many consumer stocks, VF is ahead by 13%.
Another resurgent retro is CEC Entertainment (CEC, $50), as in Chuck E. Cheese's restaurants. These pizza parlors cum game centers (a 10-year-old's ultimate fantasy) have been around since 1977 but really came into their own in the '80s. The company seems to have found a new groove this year. (Kids of '80s kids? Already?) The stock's up 33% so far in 2001, pushing the company's market cap above $1 billion. Earnings have been on a roll--up for 18 straight quarters. So what's the appeal? In the mid-1990s management started spiffing up existing restaurants, adding more of them at a rate of about 10% a year (there are nearly 400 in the U.S. now) and upgrading the games. Then there's the company's mascot, Chuck himself: "He used to have a tail and whiskers--some would have said that he was ratlike," says Jon Rice, CEC's vice president of marketing. "But we've cleaned him up--he's definitely a mouse."
Finally, no story about '80s stocks would be complete without a mention of the decade's ultimate icon--Apple Computer (AAPL, $27). Steve Jobs is back at the helm, and consumers are snapping up the sleek new Titanium laptop. The stock, after a big tumble, is looking pretty slick itself: It has soared almost 80% since January. Which brings to mind the ultimate '80s mantra, as delivered by the fictional Gordon Gekko in Wall Street. "Greed," he said, "is good." That's one idea that we imagine never goes out of fashion--at least not in the stock market.