Owners of Wesfarmers Ltd (ASX: WES) shares have benefited from a very strong performance in the last few years. In the past two years alone, it has risen more than 40%, as shown on the chart below. But, it may be worth considering adding additional ASX retail stocks to a portfolio.  

I believe diversification is an important tool in investing. Having too much of our portfolio focused on just one business may not be helpful.

I'd call Wesfarmers one of the best businesses on the ASX, with its Bunnings and Kmart divisions. I also like how the company diversifies into areas like healthcare and lithium mining.

However, for investors thinking about adding more money to their portfolio, diversifying their ASX retail stock exposure if Wesfarmers is already a major component of the portfolio could be a good idea. Below are two other retailers I like.

Accent Group Ltd (ASX: AX1)

Accent is largely a shoe retailer – it acts as the local distributor of multiple global brands, including Vans, Hoka, Skechers, Herschel, Sebago, Merrell, Dr Martens and Ugg. It also has a number of its own businesses, including Stylerunner, Platypus, The Athlete's Foot, Hype and more.

Investors can often treat discretionary ASX retail stocks quite cyclically – share prices can move significantly up and down as confidence about the economy changes. As the chart below shows, the Accent share price is down by close to 30% since 5 December 2024.

The valuation is lower, but the company's sales and profit still look positive.

In the first half of FY25, the company reported group sales (including franchisees) rose 4.2% to $844.6 million, operating profit (EBIT) grew 11.5% to $80.6 million, and net profit after tax (NPAT) went up 11.7%. It demonstrated pleasing operating leverage.

The ASX retail stock reported that like-for-like sales in the first seven weeks of the second half of FY25 increased 2.2% year over year. Accent plans to open at least 10 additional new stores in the second half of FY25, which can help boost the company's overall sales for at least 12 months after the store's opening.

According to forecasts on Commsec, the Accent share price is valued at under 11x FY26's estimated earnings.

Premier Investments Ltd (ASX: PMV)

This business has three main areas: a large holding of Breville Group Ltd (ASX: BRG) shares, child stationery and accessory business Smiggle and sleepwear retailer Peter Alexander.

When we look at the Premier Investments share price, we can see it has dropped by more than 10% in the last month – I think this makes it even more attractive considering the growth outlook for the business.

To me, the most exciting segment of the company is Peter Alexander. Not only does its store network continue to expand in Australia, but it's also starting to grow in the UK. It opened a handful of stores at the end of last year, and I think it'll continue to open more stores in 2025 and beyond.

Smiggle isn't firing on all cylinders at the moment, but store growth in emerging markets could help the company increase its overall earnings in the longer term.

I'm bullish about what Breville and Peter Alexander can achieve in the coming years as they expand to new markets, driving Premier Investments' underlying profit higher and increasing the company's value.

I think this ASX retail stock could be materially bigger and more profitable five years from now.