Specialty apparel retailers luring American buyers

Specialty apparel retailers have been enjoying higher sales and wider margins, but April sales could temper investor enthusiasm.

On May 4, shares of Gap (GPS) were up 34 percent from February 1, the start of the retailers' fiscal first quarter, with Abercrombie & Fitch (ANF) up 39 percent, J. Crew Group (JCG) up 23 percent, and Urban Outfitters (URBN) up 18 percent. American Eagle Outfitters (AEO) was the laggard with a gain of nearly 6 percent.

Consumer spending has rebounded more strongly than expected, with retail sales rising 1.6 percent in March.

Consumers are starting to get tired of having to only shop at the lowest-priced retail outlets, particularly in apparel, which arguably had the worst performance during the recession. They are now searching out retailers that offer good value. And consumers' concept of value has expanded beyond just price to quality and durability, as well as comfort and service, he says. They are also doing their homework, researching products and prices online before walking into stores.