Lululemon Athletica inc. (LULU), DSW Inc. (DSW), The Wet Seal, Inc. (WTSL): Are There Still Opportunities in Apparel?

Furthermore, the company has been cutting costs by reducing its workforce and closing underperforming stores. Savings are expected at over $3 million in 2013. Meanwhile, its balance sheet remains strong with over $110 million in cash and investments and zero debt. In addition to the cost reductions, The Wet Seal, Inc. (NASDAQ:WTSL) recently announced a $25 million share-repurchase program that will return value to investors. Following several insider purchases, I believe that this is the time to purchase this stock and hold it for some time.

Bottom line

Although none of the companies above has dug a moat for itself, both The Wet Seal, Inc. (NASDAQ:WTSL) and Lululemon Athletica inc. (NASDAQ:LULU) offer compelling growth prospects for the years to come. While still susceptible to increased competition and new entrants, these companies have developed a certain degree of customer loyalty and a strong brand name that should continue to attract customers for a few more years, at least.

Victor Selva has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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