Investing in fashion stocks

It can be a luxurious venture, but you need to be a savvy investor. Here’s what you should know about the benefits and risks of investing in fashion stocks.

What are fashion stocks?

The fashion industry generally includes all companies that sell clothing, apparel, accessories, body products and anything you wear to presumably enhance your appearance. Apparel includes online and offline wholesalers and retailers that sell clothing, footwear and accessories.

Fashion has existed as a commodity for centuries. Think of kings and queens, and you’d conjure up images of luxurious robes, jewel-studded crowns and material objects that would make heads turn. The same may be said about today’s celebrities and other trendsetters, so some investors may find it lucrative to seek fashion stocks.

Why invest in fashion stocks?

The fashion industry involves many well-known brands. You hear these names on TV, the internet and across social media. They’re promoted by the biggest names in entertainment.

But the fashion industry isn’t limited to designer handbags and dresses. Think about how many clothing and apparel stores you walk by daily. How many have you been to either in person or online in the last year? After all, people need clothes.

In fact, a report by Statista projects the global apparel market to grow from $1.3 trillion in 2015 to about $1.5 trillion by 2020’s end.

But fashion stocks aren’t limited to clothing and accessories. They also include stocks of makeup companies. According to a report by Grand View Research, the global skincare products market was valued at $134.8 billion in 2018 and is projected to keep growing at a compound annual growth rate (CAGR) of 4.4% up until 2025. The study attributed most of this to the expanding cosmetics industry.

But you can also look at the smaller picture when considering investing in fashion stocks. It may give you an opportunity to invest in the products you buy or the brands you like. This isn’t necessarily a bad idea, but you have to carefully study those brands to make sure they’re performing consistently well. And here is where it can get tricky.

Risks of investing in fashion stocks

One of the biggest fashion stock risks may be volatility. Much of the fashion industry is driven by consumer taste at any given time. Taste can be immensely unpredictable. A clothing trend, for example, may be “in” today and “out” tomorrow. And if the companies that promote this image don’t adapt, they could be in big trouble. So could their investors.

To add another layer of risk, the fashion space indirectly relies on other complex industries. Think about the market for gold, platinum and other precious metals needed to make luxury goods. You also must consider the markets involved in making fashion products. Foreign tensions could impact the exports of raw materials used to make items like clothing and footwear. This includes cotton, wool, silk and other fabrics. For instance, China in October 2020 demanded that its mills stop buying Australian cotton due to speculation that Australia was about to place a hefty tariff on Chinese cotton. This could affect the production of cotton-based products made in China and exported around the world.

Another factor that can contribute to volatility is consumer backlash. While the fashion industry has devout followers, it also has its share of people who aren’t their biggest fans. We’ve all seen “Fur is murder” somewhere. And you’ve probably seen a social media post about why your friend wants you to boycott a certain cosmetics brand over animal testing. If these sentiments were to grip the public consciousness on a massive scale, some fashion industry companies may suffer losses.

It’s important to keep a keen eye on the status of the fashion stocks you’re considering.

Fashion stocks

Because the fashion industry is so vast, there are several companies you can invest in. Here is a list of fashion stocks that may interest you. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

• LVMH Moet Hennessy Louis Vuitton SA ADR (LVMUY.US)

  Company summary

  LVMH Moët Hennessy - Louis Vuitton, Société Européenne operates as a luxury goods company worldwide. The company offers champagnes, wines, and spirits under the Clos des Lambrays, Château d'Yquem, Dom Pérignon, Ruinart, Moët & Chandon, Hennessy, Veuve Clicquot, Ardbeg, Château Cheval Blanc, Glenmorangie, Krug, Mercier, Chandon, Cape Mentelle, Newton Vineyard, Cloudy Bay, Belvedere, Terrazas de los Andes, Bodega Numanthia, Cheval des Andes, Woodinville, Ao Yun, Clos19, and Volcan de mi Tierra brands. It also provides fashion and leather products under the Berluti, Celine, Christian Dior, Emilio Pucci, FENDI, Givenchy, Kenzo, Loewe, Loro Piana, Louis Vuitton, Marc Jacobs, Moynat, Patou, and RIMOWA brands. In addition, the company offers perfumes and cosmetics under the Acqua di Parma, Benefit Cosmetics, Cha Ling, Fenty Beauty by Rihanna, Fresh, Givenchy Parfums, Guerlain, KVD Beauty, Kenzo Parfums, Maison Francis Kurkdjian, Make Up For Ever, Marc Jacobs Beauty, Officine Universelle Buly, Parfums Christian Dior, and Perfumes Loewe brands; watches and jewelry under the Bulgari, Chaumet, Fred, Hublot, Repossi, TAG Heuer, Tiffany & Co., and Zenith brands; and custom-designed yachts under the Feadship brand name, as well as designs and builds luxury yachts under the Royal Van Lent brand. Further, it provides daily newspapers under the Les Échos brand; Belmond, a luxury tourism service; home other activities under the Belmond, Cheval Blanc, Connaissance des Arts, Cova, Investir, Jardin d'Acclimatation, La Samaritaine, Le Parisien, and Radio Classique brands; and selective retailing products under the DFS, La Grande Epicerie de Paris, Le Bon Marché Rive Gauche, Sephora, and Starboard Cruise Services brands, as well as operates Jardin d'Acclimatation, a leisure and amusement park. The company operates 5,556 stores. LVMH Moët Hennessy - Louis Vuitton, Société Européenne was incorporated in 1923 and is headquartered in Paris, France.

  Historical performance

  Stock information

  • Market capitalization: $307882426368
  • P/E ratio: 22.2738
  • PEG ratio: 1.6965
  • Dividend yield: 0.0183%

• Gap (GPS.US)

  Company summary

  The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include denim, tees, fleece, and khakis; eyewear, jewelry, shoes, handbags, and fragrances; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, Websites, third-party arrangements, and catalogs. It has franchise agreements with unaffiliated franchisees to operate Old Navy, Gap, Athleta, and Banana Republic stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. As of December 31, 2021, the company had 2,835 company-operated stores and 564 franchise stores. It also provides its products through e-commerce sites. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.

  Historical performance

  Stock information

  • Market capitalization: $3080513536
  • PEG ratio: 2.1633
  • Dividend yield: 0.0658%

  Get more detailed information and learn how to buy GPS.US stock

• L Brands (LB.US)

  Company summary

  L Brands, Inc. operates as a specialty retailers of body care, home fragrance products, soaps, and sanitizers. The company sells its products under the Bath & Body Works, White Barn, C.O. Bigelow, and other brand names. It operates approximately 1,750 Bath & Body Works stores in the United States and Canada, as well as online at BathandBodyWorks.com. In addition, the company has approximately 295 stores in 30 other countries operating under franchise, license, and wholesale arrangements. L Brands, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

  Historical performance

  Stock information

  • Market capitalization: $21158739968
  • P/E ratio: 15.9712
  • PEG ratio: 1.6078
  • Dividend yield: 0%

  Get more detailed information and learn how to buy LB.US stock

• American Eagle Outfitters (AEO.US)

  Company summary

  American Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company provides jeans, and specialty apparel and accessories for women and men; and intimates, apparel, activewear, and swim collections, as well as personal care products for women. It also offers graphic tees and other clothing products under the Tailgate brand name; and menswear products under the Todd Snyder New York brand name. As of January 29, 2022, the company operated 880 American Eagle stores, 244 Aerie brand stand-alone stores, and five Todd Snyder stores in the United States, Canada, Mexico, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 260 locations operated by licensees in 28 countries, as well as provides products through its Websites ae.com, aerie.com, and toddsnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

  Historical performance

  Stock information

  • Market capitalization: $1918300160
  • P/E ratio: 11.0108
  • PEG ratio: 38.27
  • Dividend yield: 0.0703%

  Get more detailed information and learn how to buy AEO.US stock

• Under Armour Inc C (UA.US)

  Company summary

  Under Armour, Inc., together with its subsidiaries, engages in the developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. The company offers its apparel in compression, fitted, and loose fit types. It also provides footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company offers accessories, which include gloves, bags, headwear, and sports masks; and digital subscription and advertising services under the MapMyRun and MapMyRide platforms. It primarily offers its products under the UNDER ARMOUR, UA, HEATGEAR, COLDGEAR, HOVR, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 422 brand and factory house stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.

  Historical performance

  Stock information

  • Market capitalization: $3239301376
  • P/E ratio: 14.4565
  • PEG ratio: 1.2395
  • Dividend yield: 0%

• Lululemon Athletica (LULU.US)

  Company summary

  lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga, running, and training, as well as other sweaty pursuits. It also provides fitness-related accessories and footwear. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; interactive workout platform; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; temporary locations; and license and supply arrangements, as well as directly to consumer through mobile apps and lululemon.com e-commerce website. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

  Historical performance

  Stock information

  • Market capitalization: $37384761344
  • P/E ratio: 37.3028
  • PEG ratio: 1.4729
  • Dividend yield: 0%

  Get more detailed information and learn how to buy LULU.US stock

• Abercrombie-and-Fitch Company (ANF.US)

  Company summary

  Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer. The company operates in two segments, Hollister and Abercrombie. It offers an assortment of apparel, personal care products, and accessories for men, women, and children under the Hollister, Abercrombie & Fitch, abercrombie kids, Moose, Seagull, Gilly Hicks, and Social Tourist brands. As of January 29, 2022, it operated approximately 729 retail stores in Europe, Asia, Canada, the Middle East, United States, and internationally. The company sells products through its stores; various third-party wholesale, franchise, and licensing arrangements; and e-commerce platforms. Abercrombie & Fitch Co. was founded in 1892 and is headquartered in New Albany, Ohio.

  Historical performance

  Stock information

  • Market capitalization: $795213888
  • P/E ratio: 12.864
  • PEG ratio: -24.52
  • Dividend yield: 0%

  Get more detailed information and learn how to buy ANF.US stock

Fashion ETFs

Individual fashion stocks aren’t your only options. You can also buy shares of exchange-traded funds (ETFs) that invest in various fashion companies. ETFs are diversified and professionally managed portfolios of various securities like stocks and bonds. Here are some examples of fashion stock ETFs.

Compare trading platforms

Regardless of which fashion stock you might invest in, you need a brokerage account. You can easily open one online, but make sure to compare your options.

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Name	Product	Asset types	Stock trade fee	Minimum deposit	Signup bonus
SoFi Invest SoFi Invest		Stocks, ETFs, Cryptocurrency	$0	$0	$10 - $100 when you open an account and place a first crypto trade of $50 - $5,000+	A free way to invest in most equities.	Go to site More Info		loading Fetching your data...
BONUS eToro eToro		Stocks, ETFs, Cryptocurrency	$0	$10	8%-12% of your deposit when you sign up and deposit at least $50. T&Cs apply.	Trade stocks in the app or online with $0 commissions. Not available in NY, NV, MN, TN, and HI.	Go to site More Info		loading Fetching your data...
Public Public		Stocks, ETFs, Cryptocurrency	$0	$0	Receive a free stock slice worth between $3–$300 when you sign up for an account and deposit at least $20.	Commission-free trading in stocks and ETFs with a social networking twist.	Go to site More Info		loading Fetching your data...
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JPMorgan Self-Directed Investing JPMorgan Self-Directed Investing		Stocks, Bonds, Options, Mutual funds, ETFs	$0	$0	$125 - $625 when you open and fund an account with $25,000 - $250,000+	INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE	Go to site More Info		loading Fetching your data...
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Bottom line

Fashion stocks can be lucrative investments. But watch out for risks like volatility, changing consumer consciousness, external markets like precious metals and more. Before you start investing, compare stock trading platforms to see which one fits.