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JULY 2012 • www.apparelmag.com12

COVER STORY

By Jordan K. Speer

www.apparelmag.com • JULY 2012 13

T aking a look at the most profitable apparel companies each year is quite revealing, not only about each individual business

and the apparel industry at large, but also about the economy in general, global trends, technology shifts and the

overall zeitgeist. Last year found the Top 50 slowly unbundling themselves after the winds of the Great Recession. They

were pulling off their scarves, unbuttoning the top few buttons and easing into a somewhat sunny Recovery, focusing on right-

sizing their enterprises by examining everything — including brands, products, stores, distribution centers, real estate, people,

messaging, social media, inventories, partners, suppliers, third-party providers and technologies — to figure out what sizes

and combinations of these assets would best allow their businesses to grow and prosper.

Twelve months on, we might call this the Year of Apparel Yin-Yang (we might call it that for two reasons, actually — see

No. 1 below) because of the balance that apparel companies are starting to achieve, most notably in the forms of:

• Physical-Digital: Omni-channel is pushing the way to digital displays in stores and 24/7 shopping from mobile devices

everywhere • International-Domestic: Global expansion, particularly in the BRIC countries, is set against slowing, but

more strategic U.S. store growth, bringing us to • Refurbishment-New Construction: Some shuttering, a flurry of

remodels and relocations is set against very considered new openings, including in smaller markets • Outlet-Full-line: The

value-oriented economy is fueling a rise in outlet stores, even

as the luxury customer is alive and well • Heritage Brands-

National Labels: A thinning of legacy brands is making room

for iconic, global best-sellers, and • Technology-People:

Deployments ranging from behind-the-scenes IT systems to

customer-facing mobile technologies are balanced by the

increasing comprehension that without well-trained, enthusiastic,

happy and engaged employees at all levels, the technology

will prove fruitless.

#1 ZuoanWhat else should you expect in the Year of the Dragon?Whether its the auspicious powers and good luck brought onby this mythical creature; the “fashionable elegance” of itslifestyle brand and a design team led by chairman and CEOJames Hong, nominated one of the top three fashion design-ers by the China Fashion Association in 2009; a manufactur-ing base close to its consumer base in a country of 1.3 billionpeople whose levels of disposable income are on the rise; ora different government and business environment from thatof the United States that most contributed to Zuoan’s mete-oric debut on the chart after going public on the U.S. stockexchange last year, one thing is not debatable: This design-driven brand (Zuoan means “left bank” in Chinese, referringto Paris’ sophisticated Left Bank) has not only taken the topspot, but done so with a profit margin higher than any everreported on Apparel’s Top 50. The company, which targetsfashion-minded, upwardly mobile males ages 20 to 40 with amix of casual apparel, footwear and lifestyle accessories, sellsits products in 1,295 stores (most of which are run by distrib-utors) throughout 29 of China’s 32 provinces and municipali-ties. It outsources almost 95 percent of production but alsomaintains its own facility to control quality and also to pre-vent unauthorized disclosure of its most new and fashion-forward products.

JULY 2012 • www.apparelmag.com14

THE TOP 50

#2 lululemon athleticaIf lululemon’s soaring profits are any measure of its stated mission to “elevatethe world from mediocrity to greatness,” then it must be doing a bang-up job.The yoga and running wear specialty retailer took its profit margin from analready astounding 17.1 percent to 18.4 percent in fiscal 2011, but to listen toits executives or take a turn around lululemon.com, you wouldn’t know prof-its even figured into its corporate strategy. CEO Christine Day talks abouthelping guests, communities and educators “to build the lives they love tolive,” while the web site offers words of inspiration, information about lulule-mon’s inaugural half marathon The SeaWheeze (Aug. 11 in Vancouver, for allyou runners out there) and tips on “how to do a side crow” yoga pose. Whilefocusing on elevating the world, this Wall Street darling opened 33 stores inthe United States and Canada for a total of 155, and grew its direct-to-consumer business from 8 percent to 11 percent of net revenue. In 2012, the company will open approximately 30 new stores in the United States andCanada and five in Australia and New Zealand. In January, founder andchairman Chip Wilson left his post as chief innovation and branding officer,but continues as chairman.

#3 The BuckleNo need to buckle up for this ride, as this denim specialty retailer easily holds steady in the topthree while surpassing $1 billion in sales for the first time, increasing average transaction value5.3 percent to $103.45, increasing average price point 4.6 percent to $48.00 — and selling morethan 5 million pairs of jeans. The 431-store chain remodeled 24 stores, opened 13, andredesigned buckle.com to offer enhanced resolution and navigation, also adding online productratings and reviews to its fashion videos, tips and blog — contributing to online sales growth up25 percent, to $78 million. With its emphasis on personalized attention to its customers, indi-vidual services including free alterations, layaways and a frequent shopper program — andmore than 1,000 styles from more than 20 brands, including its own private label, whichaccounted for approximately one-third of fiscal 2011’s sales — The Buckle clearly is fulfilling itsmission “to create the most enjoyable shopping experience possible for [its] guests.” It alsodoesn’t hurt that The Buckle’s leadership — chairman of the board Dan Hirschfeld, presidentand CEO Dennis Nelson and vice president of sales Kari Smith — have a combined tenure ofmore than 102 years with the company!

#4 Francesca’s CollectionsDebuting at the top of the chart after going public last year seems tojive with the first part of its motto, “Think Big, Act Small.” Targetingthe 18- to 35-year-old, fashion-conscious female, the specialty retailer,which grew revenues by 51 percent, comps by 10.4 percent and turnedin an operating margin of 22.7 percent, is “delighted when a customeris surprised that there is more than one francesca’s.” That’s because thecompany — which added 76 locations last year for a count of 283, plansto add another 75 this year and looks to triple the count to approxi-mately 900 in the next seven to 10 years — doesn’t have stores; it has“boutiques,” each of which is designed to offer a unique and “locallyowned” atmosphere that is not at all suggestive of a national chain.That’s a tall task to accomplish, but one that francesca’s seems so far tobe mastering by offering a broad but shallow, eclectic and differentiated assortment of merchandise ranging from apparel to giftitems; carefully selecting its boutique locations; and empowering managers to use their creativity. Meanwhile, behind the scenes,francesca’s recently replaced its merchandise management system with a new scalable platform, and this year begins implementationof a new point-of-sale system while also relocating and expanding its current DC and corporate offices.

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JULY 2012 • www.apparelmag.com16

THE TOP 50

#5 Casual Male Retail GroupTaking the award for the biggest leap up the Top 50, 31 places from No. 36 last year, the largest specialty retailer of men’s big andtall apparel successfully expanded its new superstore concept, DestinationXL™, to 24 locations, and launched its e-commerce site.Launched in 2010, DXL houses merchandise from Casual Male XL, Rochester Clothing, B&T Factory Direct and Shoes XL, and fig-ures centrally in the company’s strategy to capture closer to 17 percent vs. its current approximate 11 percent share of the $3.5 bil-lion to $4.0 billion big and tall market by offering more variety in one place. Specific opportunity has been flagged in the lower-sizerange of its market — men with 42” to 46” waist sizes, who fall in the high end of the size range for most traditional retailers, buthave been reluctant to shop at Casual Male stores. In offering a greater selection and more brands than are typically found else-where in this “smaller” size, the company is looking to capture this niche audience. Casual Male expects its first franchised DXLstore to open in Kuwait in April 2012.

#7 NikeGrabbing the No. 7 spottwo years running, thissports powerhouse pulled in almost $21 billion in rev-enue and president and CEO Mark Parker revised its2015 goal upwards to $28 billion to $30 billion. Citing avolatile economic recovery and challenges ranging fromnagging unemployment, high levels of governmentdebt and rising costs of raw materials, energy and labor,Parker nonetheless notes that “external forces do notcontrol our destiny.” In the spirit of its most recentcampaign and film, “My Time Is Now,” Nike continuesits relentless pursuit of innovation and opportunity. Justa few highlights from fiscal 2011: 1) significant growthin its apparel business, with NIKE Pro becoming theleading women’s base layer brand in the United States;2) the launch of the GPS Sport Watch; 3) the opening of a state-of-the-art, sustainable, 120,000-square-meterDC in China; 4) e-commerce up 25 percent; 5) contin-ued expansion in China, India and Brazil; and 6) thereclamation of 13 million bottles from landfills inJapan and Taiwan that it turned into its lightest ever high-performance football (soccer) jerseys. Morerecently, as part of its new campaign, Nike launched the Football Stadium in Warsaw, Poland, where fanscan immerse themselves in football products, servicesand digital experiences, and also experience the energyof “The Chance,” Nike’s global football talent search,which gives young amateur footballers the chance toprove themselves on an elite stage. In May, NIKEannounced that it will divest its Cole Haan and Umbro brands.

#6 True ReligionAnother chart-topping veteran, True Religion continues to lead thefaithful with its innovative and distinctive product designs and atten-tion to fit, style and quality. With the 2011 average sales price for apair of its denim pants at $255, the company’s success also reflectslarger societal and fashion trends, namely: 1) the luxury market isalive and well; and 2) if fashion were a religion, its god would bedenim. In 2011, True Religion’s U.S. consumer direct segment gener-ated sales of $251.3 million (59.9 percent of sales), while its interna-tional segment — which includes stores in the U.K., Germany,Canada, Japan and the Netherlands as well as wholesale operationson six continents — generated net sales of $79.0 million (18.8 percentof sales). The U.S. wholesale segment generated sales of $86.3 mil-lion (20.5 percent of sales), with the remaining one percent of rev-enue generated from its licensing business, in the categories offootwear, fragrances, headwear, sunglasses and swimwear.

#8 Jos. A. Bank ClothiersAlso holding its spot, the men’s specialty retailer of tailored and casual clothing continued its strong performance, driving salesthrough a strong combination of high quality “updated classic” clothing and heavy promotions that kept men buying through therecession and positioned the company to be top of mind moving into the recovery. With suits representing 25 percent of its directmarketing sales (up 14.7 percent), it’s clear that Jos. A. Bank’s consumers are confident purchasing traditional business attire onlineand via catalog, and that bodes well for its new Factory store and Big and Tall websites, launched in 2010 and expanded last year toadd or broaden offerings — and also for last year’s expansion into international shipping online. To support its continued growth —the addition of 53 full-line, factory and franchise stores brought the total to 556 as the company marches toward its goal of approxi-mately 650 to 675 stores — Jos. A. Bank added space to one of its two DCs, and opened a third.

#10 GuessCelebrating “30 sexy years” in 2011 with aGuess 1981 collection that commemoratesthe styles of such icons as Marilyn Monroe,Guess slid four spots in the rankings butturned out a solid performance as it contin-ues to execute its global sourcing and productdevelopment plan to support its expandingretail, wholesale and e-commerce channels(see “Guess Who’s a Sourcing Innovator” inthe June issue of Apparel). In streamlining itsvendor base and achieving greater geographic balance, the company is gaining crucial flexibility to better get the jump on marketchanges and growth opportunities — which it sees as particularly strong in Europe and Asia, where it believes the GUESS? brand iswell recognized but still under-penetrated. Just a few of last year’s key initiatives in its march to tech supremacy: the companydeveloped several mobile-based initiatives, relocated its U.S. data center, implemented an assortment planning system as a tool totailor assortments to store clusters and optimize buy quantities, implemented a new POS system in its European stores, upgradedERP systems in Europe and Korea, and tapped into new functionality in its PLM system.

#11 VF Corp.With revenues up 22.8 percent, income up 55 percent and profit margin up 26.6percent, this apparel and footwear powerhouse that annually produces more than400 million units across 36 brands climbed three spots, inching ever closer to theTop 10, which it last hit in 2000. VF, wholesaler, retailer and manufacturer — thecompany still produces 31 percent of its units in VF-owned facilities — operated1,053 stores (including 188 it acquired with its recent purchase of Timberland) atthe end of last year and saw revenues from its retail and e-commerce climb to 19percent of business in 2011. This year, investments in stores of approximately $86million will be concentrated in brands with higher retail growth potential (Vans,The North Face, 7 For All Mankind) and in international store expansions. Mean-while, its Jeanswear Coalition, including the Lee and Wrangler brands, has seen acompounded annual revenue growth rate in excess of 25 percent over the past

three years in Asia, with India growing at a rate of 45 percent in2011. Last year, VF’s Ella Moss brand opened the first of 12

planned stores, in Newport Beach, Calif.

JULY 2012 • www.apparelmag.com18

THE TOP 50

#9 Polo Ralph LaurenRalph Lauren takes center stage in London this month as the outfitter of the 2012 U.S. Olympic Team. The uni-forms for the closing ceremonies and the village were revealed on the “Today Show” in April, and you too canbe a part of history and look like an Olympian (well, maybe) by creating your own Olympic apparel online, cus-tomizing your colors and adding your name, while counting down to the opening ceremonies and “meeting theathletes” online through their stories, stats and more. Or, if the Olympics aren’t your thing, take a turn throughthe Hamptons via Ricky Lauren’s book, “The Hamptons: Food, Family and History.” You can buy the book — oryou can “shop” the book online. You might like to peruse RalphLauren.com’s Style Guide, read RL Magazine ortake a peek inside the global flagship stores — online. Whether Ralph Lauren is curator of style, media mogul orretailer extraordinaire is hard to pin down these days, and that’s just the point. The company long ago perfectedthe art of lifestyle merchandising, and behind the scenes its tech savvy has been groomed to match — online,in-store and across its global supply chain.

Pictured here are Vans jeans and Timberland®Earthkeepers® hookset handcrafted fabric oxfordin blue canvas, representing just two of theseemingly endless number of brands in VF’sportfolio.

http://www.tagsysrfid.com

JULY 2012 • www.apparelmag.com20

THE TOP 50

#13 Urban OutfittersSales were up 8.8 percent but net income plummeted 32.1 percent and profitmargin took a dive of 37.6 percent, which dropped the company nine spotsfrom last year’s position at No. 4. Following four straight quarters of decliningnet income — after which CEO Glen Senk left his position and Urban’scofounder Robert A. Hayne took up the reins — first quarter results for fiscal2013 look somewhat encouraging, with sales driven in part by positive regular-price comp sales, a reflection that the company is getting its creative grooveback and product is striking a chord with the consumer, although profit marginover the same quarter last year is still down by 131 basis points. Continuing toexpand its store base here and in Europe, the company plans to open approxi-mately 55 to 60 new stores this year, including 23 Urban Outfitters, 16 FreePeople and 14 Anthropologie stores. It also recently opened a second BHLDN,its bridal store, in Chicago, and will open a second terrain garden center thisyear as well.

#14 CatoTaking a significant leap from No. 21 last year, Cato’s 10 percent increase in netincome hit a record level of $64.8 million — its second consecutive year of recordnet income and fourth consecutive year of strong earnings performance — yet thesobering facts of the economy run like a rough undertow beneath its smooth sail-ing. Straight talk from chairman, president and CEO John P. D. Cato in his letterto shareholders: “Although we have read stories and have seen glimpses ofimprovement in overall economic conditions and in certain segments of the retailindustry, many of our customers remain in a difficult and uncertain situation withslow job growth and the price of gas and food taking an even larger piece of theirdisposable income.” While facing lower customer demand and, like most retail-ers, higher prices from increased labor and material costs in 2011 — Cato is debt-free and using its approximately $245 million in cash to invest in new conceptsand stores. It opened 38 in 2011, including the first 10 of its Versona Accessories,aimed at customers with higher income levels than shoppers at its other stores —a new concept that will allow Cato to expand its customer base while also diversi-fying its real estate.

#12 Limited BrandsVictoria’s Secret has launched a new bra, and it’s a showstopper.No, really. That’s what it’s called, or, if you prefer, “summer’shottest multi-way,” because, you know, you can wear it five ways.Limited Brands owns retail lines La Senza, Henri Bendel and itsflagship brands Bath & Body Works and Victoria’s Secret, but themajority of sales come from its sexiest side, with Victoria’s Secretracking up $6.1 billion out of $10.4 billion in 2011 total companyrevenues, up 11 percent over the previous year. Overall, LimitedBrands turned in a good year, with comp-store sales up 10 percentand a record adjusted operating income rate of 14.9 percent. Thecompany maintained a focus on its domestic business whileexpanding internationally in a “deliberate and disciplined” manner,including in Canada and the Middle East. As it has done in the past— eliminating businesses such as Express and The Limited to focuson core strengths — this year the company divested 50 percent of itsthird-party apparel sourcing business, Mast Global Fashions. It alsoannounced the closing of 38 underperforming La Senza stores.

A ranking of apparel companies (with at least $100M in annual sales) that are publiclytraded on the U.S. stock exchange by their profit margin for the most recent fiscal year.

*NOTES: New = The company is appearing in the Apparel Top 50 for the first time. Back = The company has been ranked in the Apparel Top 50 in previous years but was not rankedlast year because of its performance, because it was not publicly traded, etc. Dollar amounts are in millions of U.S. dollars. Levi Strauss & Co. is a privately held company that releasesfinancial data publicly. Apparel does not include department stores in its Top 50 rankings (see Top 10 department store rankings in next month’s issue). Nordstrom files with the SECunder “Retail - Family Clothing Stores” (SIC code 5651).

% %% Profit Profit

Last Most % Most Change Margin, Margin,2012 Year’s Recent Previous Change Recent Previous Net Most PreviousRANK Rank Company FY FY FY Sales FY FY Income Recent FY FY

THE TOPSALES NET INCOME

1 New Zuoan Dec. $193.9 $137.3 41.22 $40.3 $28.8 39.93 20.78 20.98

2 1 lululemon athletica Jan. $1,000.8 $711.7 40.62 $184.1 $121.8 51.15 18.40 17.11

3 2 The Buckle Jan. $1,062.9 $949.8 11.91 $151.5 $134.7 12.47 14.25 14.18

4 New Francesca’s Collections Jan. $204.2 $135.2 51.04 $22.5 $16.0 40.63 11.02 11.83

5 36 Casual Male Retail Group Jan. $397.7 $393.6 1.04 $42.7 $15.4 177.27 10.74 3.91

6 5 True Religion Jeans Dec. $419.8 $363.7 15.42 $45.0 $43.5 3.45 10.72 11.96

7 7 Nike May $20,862.0 $19,014.0 9.72 $2,133.0 $1,907.0 11.85 10.22 10.03

8 8 Jos. A. Bank Clothiers Jan. $979.9 $858.1 14.19 $97.5 $85.8 13.64 9.95 10.00

9 7 Polo Ralph Lauren Mar. $6,859.5 $5,660.3 21.19 $681.0 $567.6 19.98 9.93 10.03

10 6 Guess? Jan. $2,688.0 $2,487.3 8.07 $265.5 $289.5 (8.29) 9.88 11.64

11 14 VF Corp. Dec. $9,459.2 $7,702.6 22.81 $888.1 $571.4 55.43 9.39 7.42

12 10 Limited Brands Jan. $10,364.0 $9,613.0 7.81 $850.0 $805.0 5.59 8.20 8.37

13 4 Urban Outfitters Jan. $2,473.8 $2,274.1 8.78 $185.3 $273.0 (32.12) 7.49 12.00

14 21 The Cato Corp. Jan. $931.5 $924.7 0.74 $64.8 $58.9 10.02 6.96 6.37

15 18 Express Jan. $2,073.4 $1,905.8 8.79 $140.7 $127.4 10.44 6.79 6.68

16 13 UniFirst Aug. $1,134.1 $1,025.9 10.55 $76.5 $76.4 0.13 6.75 7.45

17 28 Zumiez Jan. $555.9 $478.8 16.10 $37.4 $24.2 54.55 6.73 5.05

18 New Body Central Dec. $296.5 $243.4 21.82 $19.7 $9.8 101.02 6.64 4.03

19 20 Under Armour Dec. $1,472.7 $1,063.9 38.42 $97.0 $68.5 41.61 6.59 6.44

20 19 Nordstrom Jan. $10,500.0 $9,310.0 12.78 $683.0 $613.0 11.42 6.50 6.58

21 22 Cintas Corp. May $3,810.4 $3,547.3 7.42 $247.0 $215.6 14.56 6.48 6.08

22 23 Chico’s FAS Jan. $2,196.4 $1,905.0 15.30 $140.9 $115.4 22.10 6.42 6.06

23 27 Columbia Sportswear Dec. $1,694.0 $1,483.5 14.19 $103.5 $77.0 34.42 6.11 5.19

24 25 Ascena Retail Group July $2,914.0 $2,374.6 22.72 $170.5 $133.4 27.81 5.85 5.62

25 31 HanesBrands Dec. $4,637.1 $4,326.7 7.17 $266.7 $211.3 26.22 5.75 4.88

26 11 Gap Jan. $14,549.0 $14,664.0 (0.78) $833.0 $1,204.0 (30.81) 5.73 8.21

27 12 Maidenform Brands Dec. $606.3 $556.7 8.91 $33.2 $45.3 (26.71) 5.48 8.14

28 10 Carter’s Jan. $2,109.7 $1,749.3 20.60 $114.0 $146.5 (22.18) 5.40 8.37

29 Back PVH Corp. Jan. $5,890.6 $4,636.8 27.04 $317.9 $53.8 490.89 5.40 1.16

30 32 rue21 Jan. $760.3 $634.7 19.79 $39.0 $30.2 29.14 5.13 4.76

31 24 The Warnaco Group Dec. $2,513.4 $2,295.8 9.48 $127.5 $138.6 (8.01) 5.07 6.04

32 42 The Men’s Wearhouse Jan. $2,382.7 $2,102.7 13.32 $120.6 $67.7 78.14 5.06 3.22

33 33 American Eagle Outfitters Jan. $3,159.8 $2,967.6 6.48 $151.7 $140.6 7.89 4.80 4.74

34 30 The Children’s Place Jan. $1,715.9 $1,674.0 2.50 $77.2 $83.1 (7.10) 4.50 4.96

35 29 Ever-Glory International Dec. $215.8 $134.1 60.92 $9.6 $6.7 43.28 4.45 5.00

36 43 Destination Maternity Sept. $545.4 $531.2 2.67 $23.0 $16.8 36.90 4.22 3.16

37 26 G-III Apparel Group Jan. $1,231.2 $1,063.4 15.78 $49.6 $56.7 (12.52) 4.03 5.33

38 39 G&K Services July $828.9 $833.6 (0.56) $33.2 $28.6 16.08 4.01 3.43

39 37 Ann Inc. Jan. $2,212.5 $1,980.2 11.73 $86.6 $73.4 17.98 3.91 3.71

40 3 Oxford Industries Jan. $758.9 $603.9 25.67 $29.4 $78.7 (62.64) 3.87 13.03

41 38 Superior Uniform Group Dec. $112.4 $105.9 6.14 $4.1 $3.8 7.89 3.65 3.59

42 45 Delta Apparel June $475.2 $424.4 11.97 $17.3 $12.2 41.80 3.64 2.87

43 34 Abercrombie & Fitch Co. Jan. $4,158.1 $3,468.8 19.87 $127.7 $150.3 (15.04) 3.07 4.33

44 9 Aeropostale Jan. $2,342.3 $2,400.4 (2.42) $69.5 $231.3 (69.95) 2.97 9.64

45 40 Levi Strauss & Co. Nov. $4,761.6 $4,410.6 7.96 $135.1 $149.4 (9.57) 2.84 3.39

46 44 Perry Ellis International Jan. $980.6 $790.3 24.08 $25.5 $24.5 4.08 2.60 3.10

47 47 Wet Seal Jan. $620.1 $581.2 6.69 $15.1 $12.6 19.84 2.44 2.17

48 46 Stage Stores Jan. $1,511.9 $1,470.6 2.81 $31.0 $37.6 (17.55) 2.05 2.56

49 35 Stein Mart Jan. $1,160.4 $1,181.5 (1.79) $19.8 $48.8 (59.43) 1.71 4.13

50 Back Wacoal March $2,002.5 $2,075.4 (3.51) $33.3 $32.1 3.74 1.66 1.55

50

JULY 2012 • www.apparelmag.com22

#18 Body CentralMaking its debut on the Top 50 after completing an IPO in October 2010, the 241-store ladies’ wear specialty retailer offers on-trend, quality apparel and accessories at value prices under the Body Central and Body Shop banners and via bodyc.com. Mostproducts are sold under its private labels, Body Central® and Lipstick®, and are presented to emphasize coordinated outfits in fourmajor lifestyle categories: casual, club, dressy and active. The company’s “test-and-reorder strategy” — testing small quantities inits stores before placing larger purchase orders for a broader rollout — allows it to respond rapidly to changing trends and this yearcontributed to record sales and earnings, comp-store sales up 11 percent and, for the first time in its 40-year history, an operatingmargin of more than 10 percent. The company made key hires in finance, store operations, merchandising, information technologyand real estate while also implementing new systems including store labor scheduling, sales audit and loss prevention and collect-ing nearly 1 million customer addresses for its CRM database. This year, the company will add a new merchandise allocation sys-tem, hand-held scanners and at least 35 new stores.

#17 ZumiezThe Washington-based 444-store boardsport-apparelretailer is up 12 spots on the Top 50, with a remarkable54.6 percent increase in net income and a 33.1 percentincrease in profit margin, to 6.73 percent. With 33straight years of profitability, Zumiez has succeededwhere some competitors have not by creating a uniquecustomer experience with the look and feel of an inde-pendent specialty shop (think couches and video games),shelves stocked with an extensive array of distinctivemerchandise (including its own private label at 17.7 per-cent of sales), and sales associates who share their cus-tomers’ passion for activities that include skateboarding,surfing, snowboarding, BMX, motocross — and the musicand lifestyle that go along with them. This year the com-pany plans to open approximately 50 stores and relocateits e-commerce fulfillment center from Washington toKansas to help speed product to the consumer. Recently,Zumiez engaged CrowdTwist to develop an innovativeloyalty program, dubbed The Zumiez Stash, which allowscustomers to earn points for rewards including limited-edition apparel, skate decks autographed by celebratedathletes, and even vacation packages. Last month, thecompany announced it will acquire Austrian action sportsretailer Blue Tomato for $75.3 million.

THE TOP 50

#15 ExpressMaking a strong debut at No. 18 last year after going public in May 2010,Express — divested by Limited Brands in 2007 — this year climbs anotherthree spots with strong growth in sales (including comps), net income andprofit margin. The company has emerged from a combo of 30 years of retail-ing experience and new owners with a trendy vibe offering the 20- to 30-year-old gal and guy a fresh, spirited style that crosses from work to play.Meanwhile, its web site features EXPRADIO (webtunes for listening or pur-chase); EXPLIFE (music videos, fashion shoots and news); and EXPMOBILE(an app for your smartphone). Last year, the company tested and introduceda new store design which it will continue to roll out, and this spring itlaunched a new loyalty program, Express NEXT, which should help build acloser bond with consumers. But a connection clearly has already beenestablished — last year, the company’s customers and fans helped Expressset the Guinness World Record for Most People Modeling on a Catwalk!

#16 UniFirstDespite the sluggish economy andhigh U.S. unemployment, thelarge workwear and textile ser-vices company celebrated its 75thanniversary in 2011 with recordrevenues of $1.134 billion andrecord net income of $76.5 mil-lion. Drilling down, the company’score Laundry Operations, whichrepresents the majority of UniFirstbusiness, reported a 9.8 percentrevenue increase to a record$997.0 million, while its SpecialtyGarments segment, which provides products and services to thenuclear and cleanroom industries, hit record revenues and operat-ing income, up by 17.4 percent and 10.1 percent over the previousyear, respectively. UniFirst cites its leading position in the U.S.nuclear market, major reactor rebuild projects in Canada and newdecommissioning initiatives in Europe as contributing to this rise,and you can’t help but assume that Japan’s earthquake, tsunamiand subsequent Fukushima nuclear power plant disaster are con-tributing to greater diligence when it comes to managing thesefacilities globally. UniFirst’s third operational division, First Aid,also hit a record, reporting revenues up by 12.5 percent.

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THE TOP 50

#20 NordstromThe master of the customer experience has been trying tobring its renown service skills to Manhattan shoppers forabout 10 years now, and while it still hasn’t located real estatefor a full-size department store, the luxury chain made a foot-print of a different sort, opening a philanthropic shop in thecity’s SoHo district. Dubbed treasure&bond, the store givesNordstrom a feel of the pulse of the New York shopperthrough their reactions to an eclectic mix of apparel and homedécor, and donates profits to local charities. In another atypical— and somewhat controversial — move, the company beganselling its returned and worn shoes at its Nordstrom Rackstores, which some critics feel cheapens the brand’s image butothers see as capitalizing on the thriving market for pre-owned couture among today’s youth. Also in 2011, the 111-

year-old retailer hit record revenues of $10.5 billion, up 12.7 percent, saw same-store sales increase 7.2 percent, increased directsales by 29.5 percent while launching everyday free shipping and returns, deployed more than 6,000 mobile POS devices and 1,300tablets across its 117 full-line stores, hit a record $2 billion-plus in sales at its Nordstrom Rack stores and added 850,000 members toits Fashion Rewards program for a total of 2.6 million. In April, the company made a $16.4 million investment in online pants-maker Bonobos, and will begin selling its clothing in stores and online.

#21 CintasRevenues are up in all four of its operating segments — Rental Uniforms and Ancillary Prod-ucts, Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Man-agement Services — as the company climbs one spot with a 14.6 percent increase in net incomeand a 6.7 percent increase in profit margin to 6.5 percent, and business is looking even brighterfor fiscal 2012. For the first three quarters ended on Feb. 29, revenues are up 8.9 percent and netincome is up 24.2 percent for a profit margin of 7.2 percent, which is a 14.1 percent increase overthe same period last year. In ongoing efforts to promote sustainability, Cintas introduced what itsays it the hospitality industry’s very first machine-washable tuxedo — partially composed ofrecycled polyester made from recycled plastic bottles — which protects the environment fromthe chemicals used in dry cleaning while saving businesses approximately $1,000 per employeeannually by eliminating that expense.

#19 Under ArmourUnder Armour’s (UA) first $1 billion in net revenues was built largely on syntheticmaterials, but chairman, president and CEO Kevin Plank believes last year’s introduc-tion of Charged Cotton will open the path to quadrupling its market in “active use”apparel. UA continues to expand far beyond its core compression apparel heritage,last year also introducing the UA Charge RC lightweight running shoe and the E39™shirt, whose integrated biometric and athletic performance monitor communicatesdata at up to 100 times per second and provides sport-relevant actionable feedback to the wearer. To support its direct-to-consumer business, which grew 62 percent to represent 27 percent of revenue, the company initiated a major upgrade of its e-commerce site, while globally, UA grew 35 percent outside North America and tooka big step toward capturing a larger share of the sportswear market in China (expectedto grow from $13 billion in 2010 to $30 billion by the end of 2013) by opening its firstshop there. Meanwhile, UA’s new partnership with the Tottenham Hotspur FootballClub of the English Premier League should widen the market for its soccer products— the club boasts more than 20 million fans and an audience of more than 4 billionpeople — bringing Under Armour that much closer to its stated goal of doubling netrevenues to more than $2.1 billion by 2013.

UA Highlight cleat featuring CompFit ankleconstruction for a locked in fit, and UnderArmour’s proprietary MPZ material.

#23 Columbia SportswearClimbing four spots as its profit margin increased 92 basispoints to 6.1 percent, the company’s continuing momentum intechnology and design innovation for “keeping people warm,dry, cool and protected in the outdoors” is paying off as theColumbia Sportswear brand hit a record $1.39 billion in sales,up 10 percent from 2010 and 30 percent from 2009. Mostrecently, the company introduced technology that retains thewearer’s own sweat to keep the body cool. It’s called Omni-Freeze® ZERO under theColumbia banner, andCool.Q under itsMountain Hard-wear brand.

Speaking of, that brand’s sales grew 17 percent in 2011, total-ing $142 million. The brand also worked with leading alpin-ists, including Swiss speed-climber Ueli Steck, to develop anassortment of high-performance apparel and equipmentthat reduced the weight of the typical ascent kit by morethan 50 percent. Meanwhile, the strategic repositioning ofSorel two years ago as a premium brand targeting young,fashion-forward female consumers proved successful, withSorel the company’s fastest growing brand in 2011, postinga 68 percent increase in global sales to $150 million.

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#22 Chico’sIn just three years, the 1,250+-store retailer has turned aroundan operating loss of $40 million to an operating income of$222 million, continuing its steady climb up the Top 50. Theowner of Chico’s, White House | Black Market, Soma Inti-mates and the newly acquired Boston Proper (a direct-to-con-sumer women’s apparel retailer) turned out record sales up15.3 percent to $2.2 billion (its third consecutive year of doubledigit sales growth) and comp sales up by 8.2 percent. Thecompany also drove a four-wall profit in Soma for the firsttime. As part of its growth strategy, the company plans toopen at least 120 new stores each year for the next severalyears — including test stores for Boston Proper in 2013 —while focusing on its trademark “Most Amazing Personal Ser-vice,” innovative marketing plans, leveraging expensesthrough shared services and brand optimization.

THE TOP 50

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THE TOP 50

#24 Ascena Retail GroupThe company ended its fiscal year in July 2011 up one spot, with sales up 22.7 percent, net income up 28 percent and profit marginup 23 basis points to 5.85 percent, results that included the first full year of operations for tween specialty retailer Justice. The ownerof dressbarn, maurice’s and Justice ended the year debt-free and with cash and investments of $436 million, which came in handyfor this year’s acquisition of plus-size women’s retailer Charming Shoppes. The corporate name change from dressbarn to AscenaRetail Group in December 2010 is part and parcel of the company’s fundamental shift from a single chain to a family of retailbrands, each serving its own niche yet benefitting from greater strategic options, operational efficiencies and additional financialflexibility, such as last year’s consolidation of its dressbarn DC operations with the scalable, leading-edge Justice facility in Etna,Ohio. Results for 2012 look promising — for the nine months ended April 28, revenue is up 10.3 percent and net income is up 12.9percent over the same period last year.

#25 HanesbrandsThis Apparel 2012 Sustainability All-Star (see lastmonth’s issue for the full story) climbed six spotson the Top 50, demonstrating that environmentalstewardship can go hand-in-hand with risingprofits. Since 2007, the company, which operates43 manufacturing facilities, has reduced carbonemissions per garment produced by 27 percent,reduced water use by 33 percent per garmentproduced and has used renewable sources ofenergy for more than 33 percent of its worldwideneeds. Meanwhile, $47 million went towarddesign, research and product development, keep-ing its brands holding steady at either the No. 1or No. 2 U.S. market position by units sold, inmost product categories in which the companycompetes, according to the NPD Group. Wal-mart, Target and Kohl’s took the prizes for largestcustomers, accounting for 25 percent, 16 percentand 6 percent, respectively, of total sales in 2011,while international sales represented 13 percentand direct-to-consumer 8 percent of total sales.

#26 GapNow you too can dress like “Mad Men’s” Don Draper or Peggy Olsen withthe new limited collection from Banana Republic, show your spirit by pur-chasing licensed NFL products at “Superfan Nation” shop-in-shops at OldNavy or pay with Google Wallet (and get a 15 percent discount) in stores inSan Francisco. Although Gap Inc. dropped 15 spots with disappointing finan-cial results, including an earnings decline for the first time since 2006, the3,263-store company is making major strides on multiple fronts. Internation-ally, the company continues to branch out — everywhere. Customers cannow experience Gap brands and touch products in 39 countries, up from justsix countries in 2007, including 14 (soon to be 45) in China and its first inSouth America, in Chile. In its goal to optimize across multiple brands, chan-nels and geographies, the company brought together its outlet and specialtydivisions, brought its creative talent together under one roof in New York andshifted to one international division, led out of London. This year, Gap willclose nearly 200 U.S. stores while focusing on reviving fashion at home andexpanding globally; Old Navy will open its first store outside North America,in Japan; Athleta will open about 50 more U.S. stores; and Piperlime will openits first brick-and-mortar store, in New York. Direct business was up morethan 20 percent to more than $1.5 billion, with the company shipping to 90countries. Since launching an e-commerce site in China last year, onlineorders have been logged from more than 330 cities in that country!

#27 Maidenform BrandsWhile revenues were up 8.9 percent company-wide — withnotable increases across shapewear (up 25 percent), massmerchants (24 percent), international markets (23 percent),Donna Karan brands (41 percent), panties (26 percent); andonline sales (31 percent) — gross margin pressuresdepressed the company’s net income, lowering its profitmargin and dropping Maidenform 15 spots on the Top 50.The company also saw a 22 percent decline in its private-label business and a slower growth rate of approximately 5percent across its department and national chain store busi-nesses — trends that CEO and director Maurice S. Resniksays he expects will reverse this year. Founded by entrepre-neurs Ida Rosenthal and Enid Bissett in 1922, the companycelebrates its 90th anniversary this year with its innovativespirit alive and well — and still focused on women and theircurves. This year will see the introduction of three new col-lections for shaping, lifting, smoothing, slimming and pro-viding extreme comfort.

#28 Carter’sA look at the CIA’s “World Factbook” shows that in rankings ofthe top 25 countries by fertility rate, only one — Afghanistan —is not in Africa. Sounds like a challenging, but potentially fruit-ful, opportunity, if you’re looking for kids to clothe… Here inthe US of A, Carter’s increased its leading share of the youngchildren’s wear market to 16 percent but struggled with thespike in cotton prices, which sent its product costs soaring byabout 20 percent (or nearly $200 million), ultimately taking achunk out of its net income, which fell by 22.2 percent. With itsprofit margin down 297 basis points, the company dropped 18spots on the Top 50, but Carter’s forged ahead by strengtheningproducts, raising consumer prices, curtailing spending andincreasing investments in its high-margin retail, e-commerceand international growth initiatives, which resulted in recordsales; increased U.S. sales of its Carter’s and OshKosh B’goshbrands by 17 percent and 7 percent, respectively; e-commercesales up by more than 200 percent to $73 million; and interna-tional sales up from $35 million to $136 million.

#29 PVH Corp.Flying back onto the Top 50 after just missing the cut in 2011, PVHwas led by global designer lifestyle brands Calvin Klein ($7.6 billionin global retail sales) and Tommy Hilfiger ($5.6 billion in global retailsales), both of which put up double-digit growth and together repre-sented approximately 75 percent of the company’s business. In 2011,the company focused on product, sourcing, infrastructure and newmarketing programs while enhancing platforms globally, including inAsia, where it established joint ventures in China and India for itsTommy Hilfiger brand, which it acquired in 2010. Although it main-tained a leading market position in the U.S. dress shirt and neckwearcategories, PVH was challenged by cost pressures on its moderately-priced Heritage brands and is streamlining its portfolio by exiting itslicenses for Timberland men’s sportswear and Izod women’s whole-sale sportswear. The year also marked the corporate name changefrom Phillips-Van Heusen to PVH, a reflection of both its roots andthe company’s tremendous growth beyond the Van Heusen brand.

#30 rue21Targeting “anyone who wants to look and feel 21” (and I think that’s just about everybody, although everyone on its websiteappears to be just hitting legal drinking age), the specialty retailer opened 120 stores and converted 38 existing locations into itsrue21 etc! format, which typically is more profitable, featuring an expanded area for categories that offer even higher margins thanapparel, including accessories, intimate apparel, footwear, jewelry, beauty products and fragrances. By fiscal year end, approximately80 percent of its 755 stores were in the rue21 etc! layout, and plans are to open another 120 new stores and convert 30 this year inthe small-town and middle-market locations where it does business and which the company says are “starved for fashion.” Appar-ently that’s a big opportunity: rue21 is marching toward an expected base of 1,500 locations.

#31 The Warnaco GroupCalvin Klein, with an appeal that new CEO Helen McCluskey says “transcends geography, gender and age,” continues as the driverof growth in Warnaco’s portfolio and was up 12 percent to $1.9 billion, accounting for 75 percent of total revenue, while its heritagebrands, led by Speedo, were profitable and returned to a high-teen operating margin, despite a soft year in its Chaps brand. Overall,international business grew by 17 percent, accounting for 60 percent of total revenue, with sales from Asia and Latin America up 28percent. Its U.S. and European business presented more of a challenge, with Southern Europe in particular turning in a disappoint-ing performance. Direct-to-consumer growth was up by 28 percent to $726 million, with that division reporting a four-wall operat-ing margin up to a whopping 22 percent. Wholesaling is 71 percent of its business, but Warnaco also goes direct-to-consumeronline and through more than 1,750 of its own Calvin Klein retail stores. One of the goals set forth in its new five-year plan is fordirect-to-consumer sales to drive two-thirds of its growth, with full-price stores leading the way. To accomplish this, the companyhas reorganized its Calvin Klein management into two groups: one focused on creative and the other on commercial execution.

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#32 The Men’s WearhouseUp 10 spots, the company experienced one of its best years ever with revenues up 13percent to $2.4 billion and net earnings up 78 percent, marking the largest growthrate in its nearly four-decade history. Men’s Wearhouse sold a record-breaking 3 mil-lion suits, driven in part by the growing demand for the flattering, slim-fitting silhou-ette of its modern fit styles, whose sales reached $300 million in 2011, while itsCanada-based Moore’s nameplate hit a record $268 million in sales. Other standoutsinclude: 1) a partnership between Men’s Wearhouse and Vera Wang to launch Blackby Vera Wang, a collection of modern, sophisticated rental tuxedos; 2) The opening of25 smaller-format stores; enabled by the growth of its tuxedo business, the companyis entering smaller markets than it could otherwise profitably operate in, including inBillings, Mont.; Rapid City, S.D.; Idaho Falls, Idaho; and Cheyenne, Wyo. 3) continued courting of big and tall customers, who com-prised half of all meanswearhouse.com sales; 4) New online initiatives, a mobile app for booking appointments, in-store wireless;and 5) complete redesign of its management training program, and the hosting of 55 employee black-tie holiday parties.

#33 American Eagle OutfittersThe teen specialty retailer experienced a nice lift in sales (including comps up 3 percent)and earnings and a slight bump in profit margin, holding steady at No. 33 on the Top 50as it tries to find the sweet spot when it comes to right-sizing its stores, inventories andnameplates and carving out its place between rivals including value-priced Aeropostaleand higher-priced Abercrombie & Fitch. The company hasn’t been shy about testing newretail concepts, but it’s also willing to cut its losses quickly when they don’t pan out, as itdid in 2010, closing its Martin+Osa brand, and in May, announcing plans to exit its 22-store 77kids concept, which posted a loss of $24 million on sales of $40 million last year.Under new CEO Robert Hanson, a former Levi Strauss executive, the company isrevamping its sourcing and merchandising strategy to focus on faster fashion turns andselling out of merchandise each season, to avoid offering deep discounts on dated mer-chandise. The 1000-plus-store retailer remodeled 106 AE stores in 2011 and will take onanother 100 in 2012. It also continues to expand globally, this year opening its first flag-ship outside the United States, in Japan.

#34 The Children’s PlaceThe largest pure-play children’s specialty apparel retailer in NorthAmerica slips four spots in a year that was productive despite a dis-appointing fourth quarter whose unseasonably warm weatherforced the company to take aggressive markdowns to clear its winterapparel. That, coupled with record-high apparel costs, took a toll onmargins and earnings. Still, comp-store sales increased in the sec-ond half of the year in U.S. stores, and its e-commerce businessgrew by double digits, to approximately $176.2 million, accountingfor about 10 percent of total sales.To reduce operating costs, in thefirst quarter fiscal 2012 the 1,062-store company consolidated fromthree to two U.S. distribution cen-ters, streamlined its field workforceand restructured corporate head-quarters while also tightly manag-ing inventories. Meanwhile, there’sbeen a lot of movement in the C-Suite, as former Kellwood execu-tive Steven Baginski took the reinsas CFO in April, while COO EricBauer left the company last month.

#35 Ever-Glory InternationalAdding 174 La Go Go stores in just 12-months for atotal of 467, the company is flexing its retail muscles as ittransforms itself from supplier to Chinese fashion chain,offering fashion designs at lower prices than similarglobal brands. In its expanding reach, mostly in China’sTier-2 or Tier-3 cities such as Zhengshou and Taizhou,but also in Tier-1 cities including Beijing and Shanghai,the company’s retail growth is reflective of macro-demographic and economic trends in China, includingthe continued rise of the middle class beyond thebiggest cities, the growing prominence of Chinesebrands and the decreasing reliance of Chinese apparelmakers on the export market. Although retail operationsracked up sales of $53.5 million in 2011, wholesale oper-ations still accounted for the lion’s share of $162.2 mil-lion in sales, with Ever-Glory’s full-package operationsoffering casual wear, sportswear and outerwear to cus-tomers in China (53.5 percent of wholesale revenue),Germany (14.5 percent), the U.K./Europe (12.6 percent),United States (10.1 percent) and Japan (9.4 percent).

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#36 Destination MaternityPregnancy is big business, but when you’re confronting a 7percent dip in the U.S. birth rate from 2007 to 2010, on top ofan already tough macroeconomic environment — and sellingin a niche characterized by limited repeat business — connect-ing with the customer is all the more important. DestinationMaternity has developed a real community online and off tohelp mothers and mothers-to-be, with stores offering preg-nancy classes, and online community boards covering topicsranging from “trying to conceive” to “blended families.” Itmust be paying off, as record earnings and a rising profit mar-gin must surely be a measure of the company’s success inbuilding relationships. Although it did not meet its stated sales,earnings or comp-store goals, the world’s largest designer andretailer of maternity apparel continued to pay down debt, initi-ated a regular quarterly cash dividend, and accomplished a sig-nificant nationwide expansion with Macy’s. It continues togrow through new licenses, leased departments, franchisesand U.S. and international stores. Most recently, it opened itsfirst Destination Maternity store in India, launched onlineshopping in South Korea and announced an exclusive licens-ing agreement to design, produce and distribute a new JessicaSimpson maternity collection.

#37 G-III ApparelOne of the warmest winters on record contributed to an 11-spot slide down the Top 50 for G-III — whose core businessremains in outerwear — proving its decision to diversify intoother categories all the more prescient. As it is for PVH andWarnaco, Calvin Klein is playing a major role, driving its bet-ter sportswear and becoming the cornerstone of its depart-ment store business in that category, a position that G-III isusing to drive sales in all of its brands, including Jessica Simp-son, Vince Camuto, Eliza J, Kensie, Andrew Marc and Guess.Calvin Klein is also behind the success of its suit and separatesdivision and, along with Tommy Hilfiger, its new handbagand luggage business, which generated approximately $50million in sales in 2011. Spurring G-III’s performance apparelbusiness? You guessed it. And while its wholesale customersare allocating more floor space for the fast-growing perfor-mance trend, G-III is getting a piece of the action, adding toits retail segment — including Wilson, Andrew Marc andVince Camuto outlet stores — by opening its first Calvin KleinPerformance store in April, in Scottsdale, Ariz., with plans (viajoint venture) to open another 12 locations throughout main-land China and Hong Kong in the coming year.

#38 G&K ServicesAlthough it began the year with shrinking sales, its earnings and profit margin took a healthy climb, and the provider of brandedwork apparel and facility services programs ended fiscal 2011 with 4.5 percent growth in quarterly organic rentals, despite a weakeconomy still struggling with high unemployment. The company generated $67 million in cash from operations which it used topay down debt by $39.7 million and to fund its dividend, which it increased for the sixth consecutive year. The game plan continuesto call for: 1) redoubling focus on customer satisfaction, which is up more than 25 percent, along with customer retention, whichequaled its best level in six years; 2) improving execution, to build on new account sales up nearly 30 percent over the previous year;3) continuing to manage costs aggressively; and 4) addressing underperforming locations, whose improved 2011 results contributedto a boost in operating income. Operating margin expanded to 7.4 percent over 5.9 percent the previous year.

#39 Ann Inc.Actress Kate Hudson is the new face of Ann Taylor, and small is the newface of higher profits, as its smaller new concept stores turned in 50 per-cent higher productivity than the balance of the chain. It opened 17 anddownsized or converted another 23 existing stores to the new format,and on the strength of their results will open another 40 this year, as itaims to get its mojo back in its store channel, which did not meet expec-tations in 2011. Nonetheless, Ann turned in a strong year, with increasesin sales (including comps), net income and profit margin driven bystrong growth in its factory and e-commerce channels — which shouldget another boost from its new e-commerce platform, designed toimprove the online shopping experience and give consumers betteraccess to inventory across channels. In 2012, LOFT will continue to

expand into small- to mid-sized markets, which have proven successful for thebrand; grow its LOFT Outlet stores (it added 38 in 2011 for a total of 74) and itsAnn Taylor Factory stores; and expand globally, adding international shippingcapabilities online, followed by stores in Canada.

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#40 Oxford IndustriesIts rollercoaster ride on the Top 50 (No. 3 in2011, No. 43 in 2010) is likely more relatedto acquisitions accounting than a reflectionof its strength. Sales were up 26 percentand operating income was up 63 percent,attributable in part to its first full year ofownership of Lilly Pulitzer. It’s instructiveto pull up and take a bird’s-eye view ofOxford’s timeline: seven years ago, brandedapparel accounted for less than half of itssales; today, it represents more than 95 per-cent, with private-label manufacturingcomprising the balance. By distribution,

sales are split 50/50 between wholesale anddirect-to-consumer (retail and e-commerce),with direct-to-consumer tripling in salessince 2004. Tommy Bahama, with double-digit growth fueled by strong comps andrapid growth in e-commerce and itswomen’s business, opened its first company-owned international store in March, inMacau, to be followed by stores in Singa-pore, Hong Kong and Tokyo, and expects tosurpass $500 million in sales this year. Lilly,with sales up 30 percent, is a social mediamaven boasting 400,000 Facebook fans and500,000 consumer emails.

#41 Superior Uniform Group

Its three-spot slide belies the growth in the company’s sales, earnings and profitmargins, not to mention its gain in market share, due in part to the heavy invest-ment in raw material inventories it made to hedge against the cotton shortage.Although that initially proved fruitful, the company was hurt by its investmentwhen raw-material prices began declining in the latter part of 2011, and the com-pany still held three to six months of inventory, which cut into margins in thefourth quarter and will affect 2012 as the company works through its higher-priced stash. A $580,000 detailed market analysis consulting project conductedlast year also cut into earnings but should prove beneficial in capitalizing onfuture opportunities. Meanwhile, its remote staffing business, The Office Guru,continues to pay off, with net sales up to $2.93 million compared to $1.02 millionthe previous year. The company’s strong financial position leaves the door openfor new ventures, such as its everyBODY media division launched last year, aswell as for strategic acquisitions and stock buyback programs.

#42 Delta ApparelThe company recorded its eighth consecu-tive year of record sales for fiscal year end-ing June 2011, driven by organic salesgrowth, the 2010 acquisition of The CottonExchange and new license agreements, butfor the most recent nine months saw a netloss of $7.3 million. This drop is attributablein large part to 2011 record-high cottonprices, which continue to cause turmoilparticularly in its blank T-shirt business, ascustomers continue to destock inventorywhile holding off on making speculative buys in anticipation of lower futureprices. Additionally, continued weakness in the economy and slower call-outs formilitary gear have taken a toll on its Soffe business, which comprises about halfof its branded business, offsetting gains in Junk Food, To the Game and Art Gun.While the company projects an earnings loss for fiscal 2012, CEO BobHumphries, in an April earnings call, expressed “cautious optimism” for a returnto normal growth patterns in 2013, citing normalizing cotton costs, as well asinternal measures that are incurring short-term costs but should pay off in thelong run. A few examples: it just completed the conversion of The CottonExchange and To The Game to BlueCherry, putting all branded business on thesame ERP; is moving some private-label functions to El Salvador; modernizing itsdecoration equipment; investing in new capabilities for mobile and tablet devices;developing microsites for its brands; and recently opened a Salt Life flagshipstore. Fun fact: Junk Food teamed up with Rock the Vote to create a T-shirt that,when scanned with your phone or wireless device, allows you to register to vote!

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#43 Abercrombie & FitchThe teen specialty retailer made big headlines (so, what else is new?) lastyear when it offered to pay “Jersey Shore’s” Mike “The Situation” Sor-rentino not to wear its clothes. In its statement, considered by many to bea marketing ploy vs. a genuine expression of dismay, the companyexpressed concern that Sorrentino’s association with the brand couldcause “significant damage” to its image and might be “distressing” tomany of its fans. Regardless, the company’s sales were up 19.9 percenton the strength of its direct-to-consumer and international growth,although earnings were down by 15 percent and profit margin fell by 126basis points. CFO and executive vice president Jonathan Ramsden toldinvestors last month that the company will close 180 underperformingU.S. stores, primarily its A&F and kids brands, as it shifts its focus tooverseas markets, especially in Europe and Asia, where sales are growingand profit margins are higher. With just four global locations three yearsago, it now boasts 107, with 81 in Europe, seven in Asia and 19 inCanada. By brand, Hollister has the lion’s share (84), followed byA&F/kids (20) and Gilly Hicks (3). Even here in the United States, themajority of shoppers in its flagship Fifth Avenue store are internationaltourists — primarily Europeans, but also Latin Americans, particularlyfrom Brazil, and a small number of Asians.

#44 AeropostaleJust two years ago the company hit historic highsbut tumbles 35 spots as difficult macroeconomicconditions, fashion missteps and competition fromits rivals pummeled Aeropostale from all sides. Itsdecline coincides with its first few quarters underthe leadership of new CEO Thomas Johnson, whoset forth the following initiatives as keys to gettingthe company back on track: 1) evolving the mer-chandise assortment with fresh fashion; 2) focusingon brand messaging and marketing including viamobile and social channels and a newly designedstore format; 3) investing in infrastructure andtechnology, to include the continued implementa-tion of its workforce management tools and thefirst phase of implementation of its assortmentplanning and PLM tools; and 4) regaining marketshare while investing in future growth, includingthe expansion of its P.S. concept (which shouldreach the 100-store mark by the end of this year)and its e-commerce business.

#45 Levi StraussPresident and CEO Chip Bergh says he joined the company last year because it has 1) “what it takes to be the best,” including greatbrands; claim to the title of the original jean; talented people; and a global footprint operating in more than 110 countries; and 2) forthe challenge. “Despite all of the ingredients to be a top performer, this company could have done better over the last decade,” hestated in his letter to shareholders. While Levi’s has gained positive momentum — with 8 percent compound annual revenuegrowth in the past two years spurred by innovations including its Levi’s® Curve ID jeans, its Water<Less™ jeans (cumulatively sav-ing 172 million liters of water since its launch last year), its Commuter Series (see Apparel’s June issue for the complete story) and itsDockers® Alpha Khakis, as well as the launch of the Denizen brand in more than 1,700 Target stores — its top-line success hascome at a cost to the bottom line. To grow the latter faster than the former, Bergh has put forth a plan to keep a sharp focus on theconsumer and innovation while also developing a more competitive cost structure that takes advantage of its market scale and itsbrand synergies. Levi’s newly refined business model will be structured along the three pillars of brands, commercial operations andglobal retail, and the company will scale commercial operations across all three, rather than operating with three brands, each withits own sales forces and operating functions.

#46 Perry EllisThe company slid two spots and its profit margin dropped 50 basis points asit faced challenges in the second half of fiscal 2012 driven by the difficultholiday season (including requests from retailers for later deliveries of goodsand a significant increase in promotional markdowns and sales allowances)and product setbacks within its Perry Ellis and Rafaella collection busi-nesses. Sales of $123.3 million in its Rafaella business, which it acquired in2011, contributed to a 24 percent increase in revenue; organic revenuegrowth came in at 8.5 percent. In launching a strategic review of its brandsand businesses with a goal of focusing on those that offer the best potentialfor profitable growth, Perry Ellis reports that it will focus on golf, men’s andwomen’s sportswear and swim, capitalizing on its strengths in wholesaleand direct-to-consumer as well as international expansion, while it alsocontinues to create exclusive brands for retailers. It has identified somesmaller brands and businesses whose combined revenue is approximately$30 million to $40 million and which it plans to liquidate and close by theend of fiscal 2013. It has also identified approximately $5.5 million in annualcost savings it will achieve by streamlining its infrastructure.

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#47 Wet Seal

The company put a twist on its celebrated smart use of mobile and socialtechnologies by offering free Android-powered mobile phones (with thepurchase of a two-year wireless plan) to shoppers who tried on jeans at anyof its stores as part of a back-to-school promotion of its new Denim Shop.Each smartphone was equipped with iRunway, Wet Seal’s mobile applica-tion for download, which allows users to browse outfits on its website andpurchase directly from the phone. Wet Seal continued the focus on denimwith the opening of its second BLINK store, at the Walt Disney WorldResort in Florida. The concept was developed out of the retailer’s strongdenim focus and offers a wide variety of fits, lengths and washes under BlueAsphalt, Wet Seal’s exclusive label. The company plans to open approxi-mately 25 to 30 Wet Seal stores (net of store closings) in fiscal 2012, bring-ing its total to approximately 500, while maintaining its existing Arden Bstore count (86) as it focuses on improving merchandising and marketingstrategies in that business.

#48 Stage StoresAt year end, 65 percent of this small town andneighborhood retailer’s 813 stores were in townswith a market area population below 50,000,across 40 states. The company added 37 newstores, 28 under its Goody’s nameplate, and thefirst three of its newly launched Steele’s off-pricestores, a concept it will expand to 25 to 30 loca-tions this year. With e-commerce growth its toppriority in 2011, the retailer increased its presenceon social media, expanded its brand name andprivate-label offerings online and created a morecustomer-friendly online shopping experience —all of which contributed to an increase in visitors,and e-commerce sales of $8.6 million. Its finan-cial results — earnings down 17.6 percent andprofit margin down by 51 basis points to 2.05percent — reflected the economic pressures facedby its core moderate-income customer. Likeother retailers, it was forced to fight for walletshare in a highly promotional business environ-ment which led to lower merchandise margins.Controlling what it could, the company focusedon carefully managing expenses and inventory,which resulted in, respectively, a 50 basis-pointdrop in its SG&A rate and comp-store invento-ries up 1.7 percent.

#49 Stein MartLike so many retailers, Stein Mart started the year wellbut struggled in the second half, slipping 14 spots onthe Top 50. Jay Stein, who has stepped back into therole of CEO as the company searches for a replace-ment, faults the proliferation of coupon use at thecompany as diluting its brand message of “deliveringhigh-quality, fashion merchandise at everyday lowprices.” In the fourth quarter Stein Mart began a majorinitiative to reduce its reliance on coupons, achieving adecrease in their usage of more than 20 percent in thatquarter over the same period in 2010. Its ultimate goalis to reduce coupon usage by 50 percent, mostly byeliminating their use on regular-priced merchandise.While it has been on a mission to increase comp-storesales for some time now, the year saw another dip of1.1 percent, but the company holds a strong, debt-freefinancial position and has a number of merchandise-based initiatives on tap intended to reverse that slide,as well as a new merchandise information system.Meanwhile, store remodels — 40 in 2011 and 50planned for this year — have met with positive cus-tomer feedback. Its systems infrastructure also got afacelift in 2011 with new registers, servers and commu-nications links installed in all stores.

#50 WacoalThe Japanese manufacturer, wholesaler and retailer of women’s foun-dation garments and lingerie and other apparel and textile products isgrowing closer to its goal of helping women the world over “toexpress their beauty” as it continues to expand internationally. Italready has 30 operating companies overseas, and is acceleratingexpansion in China and the United States, using the latter as a basefrom which to launch into new markets including Canada, Brazil andMexico. Wacoal inched back on the Top 50, but results after one yearof its “medium-term management plan” launched in April 2011 weremixed: domestic sales were down partly due to Japan’s earthquakeand tsunami, although promotions highlighting the results of itsresearch on aging led to brisk sales of brassieres; international saleswere good but operating income remained flat because of significantinvestments in China; its subsidiary, fabric manufacturer Lecien, didnot reach operating income goals, while a sales drop of more than 10percent at its Peach John lingerie retail stores took a major toll onoverall financial results. In 2012, international expansion and re-growing Peach John will rank among the company’s highest-prioritytasks as it also focuses on wholesale operations in its mainstaydepartment-store channel, reducing inventory per item but addingSKUS and turning inventory faster; right-sizing sales personnel atstores; tapping Lecien to help expand into the lower end of the mar-ket in China; and strengthening collaboration between Wacoal andnewer Group members Lecien and Peach John.

Jordan K. Speer is editor in chief of Apparel. She can be reached at jspeer@apparelmag.com.