Out Fox The $treet

This is the second in a series on stock sectors that have yet to recover from their pre-financial crisis levels. The first report focused on domestic steel producers ( Are Steel Stocks Poised to Recover? ) that aren't anywhere near to recovery levels. I pointed out in that article that a major user of steel such as Caterpillar ( CAT ) has had a fantastic recovery to new highs. This time, the focus will be on the apparel sector and more importantly mainly women's clothing providers. Many of the high end retail providers such as Ralph Lauren ( RL ) or Coach ( COH ) or V.F. Corp ( VF ) have rebounded to new highs in 2011, easily surpassing the previous 2006/2007 highs. Whether it's because these companies provide higher end merchandise or focus on items that typically fall into the gift category or maybe it's even more of a focus on men that has helped these retailers; the stocks have all fared much better than the women's apparel sector.  Read the full article ...

More on The Jones Group. The stock likely sold off way too much, but I don't have a comfortable feeling on this sector and we're already invested in Liz Claiborne (LIZ). Amazing that Cramer is always portrayed as the 'Crazy One' but he seems to have a calming effect on some of the stocks he brings onto his show. JNY CEO on Mad Money tonight. As I said earlier, bad companies make excuses. Sure they may have a higher mix of shoes, but they clearly didn't position themselves correctly coming into the Q. Though Wall St tends to over react so don't join them.

The Jones Group (JNY) reported higher costs today causing them to miss earnings estimates by a little over 10%. Consequently the stock has slumped over 20%. Considering the stock trades at a remarkably low 10x estimates the reaction in the market has been harsh. JNY blamed higher commodity costs such as cotton, wages from employees in Asia, and transportation costs from having to ship goods via air which naturally costs a lot more. The first 2 costs should have been built into analysts models and impact most of the industry. The higher transportation costs could very well be a JNY specific issue of not ordering enough inventory early.  The news has caused a huge drop in the stock of Liz Claiborne (LIZ) seen as a major competitor to JNY and other retailers owned in our portfolios including Sears Holdings (SHLD) and Dicks Sporting Goods (DKS).  It's too early to tell whether this is an industry issue or just bad management and modeling with JNY. Yesterday, Coach (COH) repor...

Interesting article I pulled using InfoNgen. Not that I've ever heard of PhillyBurbs.com or that I have any knowledge of the fashion value of this source. What is interesting is that the writer has clear fashion knowledge and they have gone from thinking that Liz Claiborne (LIZ) is a 'granny' concept to hip enough for the writer to wear. My take is that Issac Mizrahi is making the brand hip. This is his 3rd season working with LIZ and should be close to when his impact really begins to be felt. Assuming he can lead a revival with the brand at the same time that the economy recovers combined with essentially wrapping up a restructuring of the company this could be an explosive period for the stock. Jones Apparel (JNY) which is a main competitor has already soared from $4 to $15 after reporting impressive results sooner then expected. LIZ hasn't seen such a turnaround especially on the bottom line, but that could change in a hurry if Mizrahi works his magic if only by c...

Liz Claiborne ( LIZ ) is a much maligned retailer that sorely needs a economic recovery. We've added shares in our Growth porfolo accounts just below $4 in hopes that a recovery will lead to a Jones Apparel ( JNY ) type of return. In the last 4 month JNY has soared from $4 to $15. LIZ still has some strong brands but its questionable whether management has been focused enough on building the strong brands or selling off the weak ones. If they can become more focuses and turn the results around to match that of JNY this could be a great Christmas for shareholders.