With more than half of the U.S.’ population having been vaccinated for COVID-19, and with consumer spending ticking up, the apparel retail industry is expected to see decent growth this year. Given the bullish market sentiment as physical retail shopping gradually regains its appeal, we think leading apparel retail stocks The Gap (GPS) and Carter’s (CRI) could be solid bets now. Read on.While the COVID-19 pandemic was a significant constraint for apparel retailers last year, the industry has been gradually recovering thanks to a substantial uptick in consumer spending on apparel and a growing trend in customized clothing and athleisure. The U.S. economy’s rapid recovery, and the relaxation of social distancing restrictions, have increased foot traffic in retail stores markedly of late.
As apparel retailers continue to digitize their businesses, redesign their stores and renew their product offerings, they are well-positioned to capitalize on consumers’ increased spending funded by discretionary budget savings last year. Consequently, the global apparel market is expected to hit $842.7 billion in 2025, growing at a 9.8% CAGR.
Thus, with their established retail chains and a digital presence, we believe apparel retail stocks The Gap Inc. (NYSE:GPS) and Carter’s Inc. (CRI) would be wise bets now because they might witness a solid increase in sales going forward.