G-III Apparel Group, Ltd. (GIII), Abercrombie & Fitch Co. (ANF): Invest in Apparel?

The company did record a net loss in the first quarter of this year, although first quarter is typically a weak one for apparel companies. Another potentially alarming sign, however, is the fact that its selling, general and administrative expenses growing faster than revenues. This means that employees may be lining their pockets with the shareholders’ money.

At Abercrombie & Fitch Co. (NYSE:ANF), sales haven’t been so hot. The company’s first quarter revenue in 2013 was 9% lower than in 2012. Its sales increased at an acceptable rate between 2008 and 2013, but net income declined. This company’s net income peaked at $475 million in 2007, and in 2013 it generated just a hair under half of that amount.

Foolish final thoughts

Of these three apparel makers, it seems as if Abercrombie & Fitch Co. (NYSE:ANF) would make for the worst investment. Net income that has been on the decline for years. It has rebounded somewhat since an absolutely awful 2010, but $3.9 billion still seems like too much to pay for this company that appears to be past its prime.

Phillips-Van Heusen has registered impressive gains in both sales and net income in the past few years. The company has a huge amount of intangible assets on its balance sheet, however. Intangible assets in the billions of dollars make me uncomfortable, but the company does control some truly amazing brands. If it continues to grow its net income, even if it grows at a lower rate, then the company appears to be a decent investment.

As for G-III… I’m happy that the company is bringing back the Starter satin jackets, those coats are cool. A highly concentrated customer base concern me somewhat, but a healthy balance sheet coupled with robust profit growth leads me to believe that G-III is the best investment of the bunch.

Fool blogger Ryan Palmer has no position in any of the stocks mentioned. The Motley Fool does not recommend any of the stocks mentioned.

The article Should You Invest in One of These Apparel Companies? originally appeared on Fool.com and is written by Ryan Palmer.

Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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