Revisiting the dbAccess 20th annual Store Tour and the Outlook for retail.    One month on from our Outlook report "What's in store and online for 2018", andafter a volatile earnings season, we revisit our investment theses. Our 20th annualdbAccess Retail Store Tour contrasted the confident online and value retailerswith the generally cautious traditional store-based retailers. The valuation gapshave widened in the past month, however, and therefore in this report we upgradeH&M (from Sell to Hold) and downgrade ASOS (from Buy to Hold). We reiterateour top picks AB Foods, B&M (with a raised target price) and Boohoo.    The difference a month has made: another month of polarisation.    There has been a wide spread of performance of non-food retail stocks so far in2018 (Figure 2), just like in 2017. As many stocks have risen by more than 5%as those that have fallen. Generally, though, two-thirds of retailers saw earningsdowngrades this month. Our four take-aways from the Store Tour were that: [1]investor positioning remains underweight; [2] retailers are expecting the macro in2018 to be similar to 2017; [3] few if any retailers assume that currency tailwindscan be dropped to the bottom line; [4] there is a big focus on sweating the storeestate harder, back-filling over-spaced stores with footfall-driving concessionsand investing in technology to drive availability and omnichannel.    Reiterating our top picks: Buy AB Foods, B&M, and Boohoo.    Within a diverse, stock-picking sector we reiterate the five investment themeswe identified in our Outlook report: [1] Buy the value retailers, as the consumercontinues to seek out value; [2] Watch the value traps in mid-market apparelretail; [3] Back the online brands over the platforms; [4] Remain cautious abouttransformation stories as it is a difficult backdrop for a turnaround; [5] Buy travel atthe right price due to supportive macro trends. We reiterate our sector top picks,which all benefit from the shift to value: AB Foods’ Primark, B&M and Boohoo.    These all offer structural growth and are well placed within the cycle.    Further valuation polarisation: recommendation changes to ASOS and H&M.    The UK non-food retail sector trades on a forward P/E of 13.5x, at a relativelynormal c.9% discount to the UK FTSE350. However, there is a spread of multiplesin the sector from c.7x to c.70x, reflecting differing structural and cyclical risksand growth rates. As we wrote in our Outlook report, we feel more sanguine aboutsome of the macro-exposed stocks since this is an early-cycle sector that hasalready de-rated sharply. Given the sharp moves in share price in the past monthwe upgrade H&M (from Sell to Hold) and downgrade ASOS (from Buy to Hold).

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