The Apparel/Accessories Industry can be a safe harbor during a recession. Children, sports people, and changing seasons drive elements of demand that are not discretionary. This is not to say that the entire industry enjoys uniform demand trends. It is a matter of picking stocks with clear differentiation. Take American Apparel Incorporated (AMEX: APP) for example. The company brand grows from strength to strength. It represents excellent value for young people who want to look fashionable on limited budgets. Branding goes beyond the physical attributes of clothing: the company takes fairly clear and strong positions on matters of social importance. Distribution is another key strength for this stock. The brand is available through conventional outlets and online as well. The company is focused on the home market of North America, but services demands from other continents with aplomb.
October 2008 is set to close with the stock price at less than a third of the 52-week high. The Price to Earnings Ratio is below 20. I have no financial interests in the matter, and recommend this stock for the coming week without qualification.
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