Apparel stocks still offer opportunity

Article Excerpt

Apparel companies have performed strongly in the past few years. However, competition from big discount chains is starting to slow their growth. Department-store mergers also leave them with fewer wholesale customers, while rising fuel costs and growing household debt could cut into consumer spending in 2006. These companies also face rising costs and competition from cheaper clothing from Asia, and from retailers who are also launching more private labels. Outsourcing clothing production to foreign factories can help cut costs, but new textile trade rules with China also add to their uncertainty. We still like the long-term prospects of these three apparel stocks, but only two are buys right now. JONES APPAREL GROUP, INC. $31 (New York symbol JNY; WSSF Rating: Average) designs and markets men’s, women’s and children’s clothing, footwear and accessories. Major brands include Jones New York, Gloria Vanderbilt and Nine West. Jones hires independent manufacturers to produce these products. It sells through big department stores, and through its own chain…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.