3 clothing plays dressed to impress

Specialty apparel is doing incredibly well, with fantastic growth and terrific gross margins.

By Jim Cramer Jul 24, 2014 12:43PM

Under Armour shoes worn by players on the Northwestern Wildcats © Matthew Holst/Getty ImagesYou want to hear the nuttiest idea yet? You know what group is doing incredibly well, with fantastic growth and terrific gross margins?


It's specialty apparel -- namely, Skechers (SKX), Under Armour (UA), Carter's (CRI) and Hanesbrands (HBI).


Skechers has been doing so well, with all new lines of footwear and terrific promotion. The stock is still way too cheap.


TheStreet.com logoAs for Under Armour, a heavily shorted technology stock that happens to be in the apparel industry, management has highlighted that it is doing well in footwear and in international sales. There isn't anything this company isn't doing well. The direct-to-consumer service is amazing. The gross margin is terrific. The stores are amazing. This is a momentum stock that has much further to go.


Nike (NKE) is good but not as good as Under Armour.


I have to do more work on Carter's, but this is just a remarkable back-from-the-dead story.


Then there is Hanesbrands, which is the consolidator of a fragmented undergarment industry. The company gobbled up Maidenform and has already turned it into an incredible cash machine. I profiled Hanesbrands not that long ago on Mad Money, and I think the growth is totally sustainable for at least another year.


Contrast these with VF Corp. (VFC) and PVH (PVH). The first one is doing quite well, but it has become caught up in the whole department store slowdown. The second paid way too much for Warnaco and has been struggling ever since.


I believe in both VF and PVH because the management teams are quite good. But failing to point out the disparity between the special guys on one hand and the general companies on the other would mean being oblivious.


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Jim Cramer's Action Alerts Plus: Check out this charitable trust portfolio for the stocks Cramer thinks could be winners.




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2Comments
Jul 24, 2014 8:39PM
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People wear thrift clothing today, Jim. 
Permaculture-- cotton is now grown in Stan nations because America bans the pesticides used on it. The Stans now have the highest cancer rates in the world. The water sources there are running dry. The cotton is harvested by 6 year olds without gloves. The cancer rate there among 6 year olds is rising. The picked cotton makes 7 stops before it reaches China as denim. The cancer rate in those countries is high from the dye chemicals and fiber inhalation. There are only a few factories making all of our clothing these days. The key is the label. Once manufactured, the clothing heads to the USA and to chain warehouses. It is systematically distributed to store locations and in a few months, wind up on clearance racks. 
Jim... the end-price for 40% of all clothing is LESS than the cost to cover what I describe above. The numbers are bogus. The Financial Sector is the cancer killing everything. Justification by manipulation is unsustainable. 
Jul 24, 2014 2:59PM
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  WOW! Jim has a article on here for two hours and no remarks something must be going to hell in a hand basket.
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