In this article, we will look at the Top 12 Luxury Clothing Stocks to Buy According to Hedge Funds.
Overview of the Luxury Goods Market
According to a report by Mordor Intelligence, the luxury goods market has a size of $103.10 billion as of 2024. It is expected to grow at a compound annual growth rate (CAGR) of 7.07% and reach $145.08 billion by 2029. Another study by Global Market Insights published on Yahoo! Finance shows that the luxury packaging market was valued at $17.2 billion in 2023. It is also anticipated to grow and reach $25.8 billion by the end of 2032.
Some of the primary reasons behind this growth include a rise in disposable incomes and wealth in various regions across the globe, especially in emerging markets such as India and China. In addition, younger customers such as millennials and Gen Z are entering the luxury market, with the rise of influencer marketing and social media further increasing the desirability of these products.
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Changing Consumer Spending Patterns
However, analysts expect 2025 to be a challenging year for the luxury sector. The personal luxury goods market declined for the first time since 2008, excluding 2020 due to the effects of the Covid-19 pandemic. According to the Fall 2024 Bain-Altagamma Luxury Goods World Wide Market Study, the market fell from a historic high of $387 billion in 2023 to around $381 billion. However, Bain emphasized the “long-term solid fundamentals” of the industry, saying that the luxury market “can still return to solid growth.”
Consumer spending in the personal luxury goods market is affected by macroeconomic uncertainty and a slowdown in China, according to Bain & Company’s annual luxury report. Dwindling customer loyalty and higher costs are resulting in consumers steering clear of high-end brands in 2024, slashing company profits. These consumer spending patterns are anticipated to shrink the sector by an estimated 2% over the full-year period. The report also showed that the overall luxury spending is expected to remain flat year-over-year in 2024, standing at around $1.59 billion even with other segments, such as travel, fine wine, and autos, recording modest growth.
However, the condition is not all bleak. We discussed consumer spending and the luxury market in a recently published article on the Top 12 Luxury Stocks According to Hedge Funds. Here is an excerpt from the article:
On December 17, Simeon Siegel, BMO Capital Markets senior analyst for retail and e-commerce, appeared on CNBC to discuss the state of the consumer in the current holiday shopping season. He said that the US consumer is overly resilient. In the current scenario, the market is seeing winners grow and laggers fall behind, which is how it should be. This trend goes opposite to market dynamics in COVID-19 when every company grew. Siegel was further of the view that the consumers are still spending. For better and for worse, consumers are scared of not having something under the Christmas tree this year.
On December 10, CNBC’s Steve Liesman appeared on ‘Squawk Box’ to discuss the CNBC NRF Retail Monitor. Numbers from the Monitor corroborated Siegel’s claim and showed healthy consumer spending in November despite a shorter holiday shopping season in 2024. Non-store retailers showed a 21.5% year-over-year growth, reflecting these positive trends. Since this holiday shopping season came with lower gas prices and a deflation in the prices of goods overall, consumers had more discretionary dollars in their pockets and paid somewhat less compared to a year ago. Since luxury items fall in the category of discretionary items, these trends show positive stimulus for the industry.
With these trends in view, let’s look at the top 12 luxury clothing stocks to buy according to hedge funds.
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Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 luxury clothing stocks. We then selected the top 12 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Top 12 Luxury Clothing Stocks to Buy According to Hedge Funds
12. Lanvin Group Holdings Ltd (NYSE:LANV)
Number of Hedge Fund Holders: 7
Lanvin Group Holdings Ltd (NYSE:LANV) is a luxury fashion group that operates through five portfolio brands: Sergio Rossi, Lanvin, Wolford, St. John, and Caruso. The brands offer a range of products, including apparel, leather goods, accessories, and footwear. St. John brand offers luxury womenswear, while Caruso offers luxury menswear. Wolford offers luxury bodywear and legwear. The company distributes its products in over 80 countries through e-commerce platforms, retail and outlet stores, and wholesale customers.
Headquartered in China, Lanvin Group Holdings Ltd (NYSE:LANV) has more than 1,200 points of sales, more than 300 retail stores globally, and around 3,600 employees. The company’s revenue was affected by the softness of the global luxury market in the first half of fiscal 2024, especially in Greater China and the EMEA. However, the Lanvin brand showed strong growth in APAC and outside Greater China, reflecting a 9% growth in H1 2024. The company’s strategic actions ensure the long-term competitiveness of its brands globally. These actions include a change in the company’s leadership team, supply chain management, and production optimization.
In addition, Lanvin Group Holdings Ltd (NYSE:LANV) is demonstrating operational stability and strong cost control through its proactive strategic adjustments. It is committed to investing in product development and product strategy, which is expected to support the recovery of its momentum with the improvement of the luxury market. The company ranks 12th on our list of the 12 luxury clothing stocks to buy according to hedge funds.
11. Oxford Industries, Inc. (NYSE:OXM)
Number of Hedge Fund Holders: 10
Oxford Industries Inc. (NYSE:OXM) specializes in the apparel industry and runs premium brands like Tommy Bahama, Lilly Pulitzer, Southern Tide, Johnny Was, Duck Head, and The Beaufort Bonnet Company. The company distributes its products through direct-to-consumer channels and wholesale channels.
The company showed strong traffic but reduced conversion in fiscal Q3 2024, which shows that while consumers are interested in its brands, they are exercising caution in making purchases. Despite such short-term headwinds related to consumer spending, Oxford Industries, Inc. (NYSE:OXM) is maintaining focus on investing in its business with new stores, new distribution centers, and technology, among other strategic investments. The company opened 12 net new retail locations during fiscal Q3 2024, bringing its total store count to 342 compared to 309 at the end of fiscal Q3 2023.
Oxford Industries, Inc.’s (NYSE:OXM) balance sheet is also strong, allowing it to continue investing in the future of its business, such as its store pipeline, distribution center project, and quarterly dividend. ClearBridge Small Cap Value Strategy made the following comment about Oxford Industries, Inc. (NYSE:OXM) in its Q3 2023 investor letter:
“We also added Oxford Industries, Inc. (NYSE:OXM), in the consumer discretionary sector, an apparel company operating lifestyle brands including Tommy Bahama and Lilly Pulitzer. The company’s management team has been able to consistently improve Oxford’s operating margins and sales growth over the past few years, and we believe its current stock price represents an attractive value opportunity at relatively low risk for a strong portfolio of brands within the apparel industry”.
10. Ermenegildo Zegna N.V. (NYSE:ZGN)
Number of Hedge Fund Holders: 13
Ermenegildo Zegna N.V. (NYSE:ZGN) is a luxury brand that manufactures and designs luxury women’s and children’s wear, luxury menswear, leather goods, footwear, and other accessories under its Zegna and Thom Browne brands. The company is famous for symbolizing iconic Italian luxury menswear. It operates a vast network of luxury flagship boutiques and concessions, and has dressed famous world leaders and celebrities in its quest to solidify its image of Italian luxury.
Ermenegildo Zegna N.V.’s (NYSE:ZGN) revenues for fiscal year 2024 reflect a 2.2% year-over-year increase from fiscal year 2023. Revenues for fiscal Q4 2024 also underwent a 3.3% year-over-year increase. This growth was attributed to ZEGNA’s direct-to-consumer (DTC) channel, which grew by 11% with double-digit growth in the US and EMEA. Thom Browne and TOM FORD brands also reported positive growth in the DTC channel in the quarter.
Thus, the company has a strategic project pipeline. While it expects ongoing volatility in consumer demand in China, the Americas and EMEA showed solid performance in the company’s brands in the first weeks of January. Ermenegildo Zegna N.V. (NYSE:ZGN) plans to navigate these challenges and focus on long-term growth in 2025 by continuing investments in strategic projects and building on brand equity. It ranks tenth on our list.
9. G-III Apparel Group, Ltd. (NASDAQ:GIII)
Number of Hedge Fund Holders: 20
G-III Apparel Group, Ltd. (NASDAQ:GIII) sources, designs, and markets a range of luxury apparel, including outerwear, dresses, swimwear, sportswear, and more. The company has an elaborate portfolio of proprietary and licensed brands, with its five global power brands including Calvin Klien, DKNY, Donna Karan, Karl Lagerfeld, and Tommy Hilfiger.
G-III Apparel Group, Ltd.’s (NASDAQ:GIII) operations are divided into two categories: Wholesale Operations and Retail Operations. Its Wholesale Operation segment manages product sales under brands licensed from third parties, private label brands, and its own brands. The Retail Operations segment, in contrast, consists primarily of Wilsons Leather, G.H. Bass, and DKNY retail stores. The company derives most of its revenues from its Wholesale Operations segment.
Although G-III Apparel Group, Ltd. (NASDAQ:GIII) has been navigating a challenging consumer environment, supply chain disruptions, and unseasonable weather, it saw improvements in consumer engagement in fiscal Q3 2025. Its marketing investments are a primary reason behind the company’s significant increase in consumer engagement. Traffic increased to its North American DTC stores and websites, resulting in growth in both overall sales and conversion rates. G-III Apparel Group, Ltd.’s (NASDAQ:GIII) inventory is also well positioned to support early spring demand and continue driving improvement in sales.
The company is transforming its business model to support this recovery and is consistently evaluating its infrastructure and warehousing footprint to drive better efficiencies. It is also enhancing its technology landscape and takes the ninth spot on our list of the top 12 luxury clothing stocks to buy according to hedge funds.
8. PVH Corp. (NYSE:PVH)
Number of Hedge Fund Holders: 27
PVH Corp (NYSE:PVH) is a luxury fashion company that operates Tommy Hilfiger and Calvin Klein brands. The company delivered on its revenue guidance in fiscal Q3 2024 primarily due to a disciplined execution of its brand-building growth plan, which it calls the PVH+ plan.
Although revenue for fiscal Q3 2024 was down by 5% compared to last year, the company exceeded its guidance primarily due to the timing of wholesale shipments in Europe and an acceleration of expense efficiencies. It delivered an operating margin of 10.5%, surpassing analyst estimates. This was because higher gross margins and strong expense management offset the leverage loss that occurred due to a decrease in the company’s revenue.
Analysts believe that the company has the potential to boost its brand over the long term by enhancing its marketing efforts and improving its designs. Its new management team is also anticipated to prove favorable for the company. Analysts estimate PVH Corp (NYSE:PVH) to raise its earnings per share (EPS) to $11.71 in 2025 from $10.68 in 2024. Overall, PVH Corp (NYSE:PVH) is positioning its brands for long-term, increasingly profitable sales growth. It takes the eighth spot on our list of the top luxury clothing stocks to buy according to hedge funds.
FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its first quarter 2024 investor letter:
“PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and PVH has generally recorded high single-digit organic growth with demonstrated pricing power during the preceding decade. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund US operations. Over the past year, PVH and our other apparel companies have performed well as the worst fears for consumer spending didn’t play out. PVH has become a top five holding for us and our apparel holdings (PVH, GIII, LEVI and DECK) now make up almost 10% of the portfolio. On April 2, post quarter end, PVH announced fiscal 23Q4 results where they missed on earnings guidance for the coming year. The stock is down ~20% from its high but now trades at less than ten times forward earnings. We have held our position.”
7. Ralph Lauren Corporation (NYSE:RL)
Number of Hedge Fund Holders: 30
Ralph Lauren (NYSE:RL) is a luxury fashion retailer that specializes in designing, marketing, and selling luxury lifestyle products, including apparel, footwear, accessories, fragrances, home, and hospitality. Its brand portfolio spans Ralph Lauren, Polo Ralph Lauren, Ralph Lauren Collection, Lauren Ralph Lauren, Ralph Lauren Purple Label, Double RL, and others. Apart from manufacturing luxury items for men, women, and children, the company’s hospitality segment includes restaurants like New York City’s The Polo Bar and Chicago’s RL Restaurant.
The company holds a competitive market advantage due to its ability to transcend industry cycles. While luxury retailers are typically driven by fashion trends, Ralph Lauren (NYSE:RL) focuses on the basics, which is why it has a tendency to remain relevant to its consumers even amidst changing market dynamics. The company reported revenue growth of 6% in fiscal Q2 2025, exceeding its outlook due to its direct-to-consumer channels. The growth was further attributed to continued progress across three of its strategic pillars, which included winning in the consumer ecosystem, energizing and elevating its lifestyle brand, and promoting its Drive the Core and Expand for More strategy.
Growth in digital channels was another force behind Ralph Lauren’s (NYSE:RL) performance. The company is continuing to grow its social media standing, surpassing 62 million followers. This growth was led by Instagram, Line, Threads, TikTok, and Douyin. These trends reflect the company’s increasing popularity.
Ralph Lauren (NYSE:RL) has updated its fiscal 2025 outlook, and is now expecting constant currency revenues to grow by 3% to 4%, up from the previous forecast of 2% to 3%. Strong growth in direct-to-consumer (DTC) channels and international markets are expected to drive this increase. The company ranks seventh on our list of the top 12 luxury clothing stocks to buy according to hedge funds.
6. V.F. Corporation (NYSE:VFC)
Number of Hedge Fund Holders: 30
V.F. Corporation (NYSE:VFC) is a fashion company that owns and operates a range of brands in the apparel, outerwear, footwear, backpack, luggage, and accessories categories. Its brands include The North Face, Vans, JanSport, Timberland, Kipling, and more.
The company has strong fundamentals. Almost all of its brands grew stronger in fiscal Q3 2025 compared to the last quarter. Region-wise, the Americas delivered a strong quarter of improvement for the company, going positive for the first year in the past two years. The company’s wholesale channel was also positive on a global basis. In addition, V.F. Corporation’s (NYSE:VFC) revenue grew by 2%, along with a significant improvement in profitability.
Curreen Capital talked about V.F. Corporation’s (NYSE:VFC) operations in its fiscal Q4 2024 investor letter, saying that the company has a strong portfolio of brands and the potential to drive them to profitability. With reasonable dividend cuts and a new CEO, the company is on the path to growth. Here is what Curreen Capital said about the company in its Q4 2024 investor letter:
“Since then, the S&P has gone up strongly, while the ugly ducklings that we bought have largely remained out of favor, for longer than I would have expected. We continue to implement our investment strategy, paying attractive prices for good businesses that are increasing their value. This should be rewarded in the stock market over time, but lately that process has been particularly slow and uneven.
As another example, I would have expected both V.F. Corporation (NYSE:VFC)and Advance Auto to have performed well last year, as the company’s situations are similar, and both made good progress on their turnarounds. In each case, the fundamentals are solid or improving, and I would have thought that they all would rise.
VF Corp manages apparel brands, including Dickies, The North Face, Timberland, and Vans. Under its prior CEO, the company’s poor capital allocation (including overpaying for Supreme and maintaining a too-high dividend after spinning out Kontoor) forced it to pause its model of using excess free cash flow to acquire good brands and manage them well. The company has now cut its dividend (twice) to a reasonable level and brought on a new CEO who has a track record of successfully turning around businesses. I believe that the company has good brands, the skills to manage them well, and a management team that is righting the ship. VF Corp currently trades at an attractive upside-to-downside ratio.”
5. Nordstrom, Inc. (NYSE:JWN)
Number of Hedge Fund Holders: 32
Nordstrom, Inc. (NYSE:JWN) offers luxury, private-label merchandise for women, men, and children, with a primary focus on apparel, beauty, shoes, accessories, home goods, and more items.
Nordstrom and Nordstrom Rack delivered a 4% comparable sales growth in fiscal Q3 2024, which supported the company in surpassing $3.3 billion in net sales for the quarter. Another driver of this momentum was its online business, which underwent more than 6% digital sales growth. Much of this growth was attributed to the newness Nordstrom, Inc. (NYSE:JWN) has introduced in its brands. Customers are increasingly relating to the company’s offerings, driving positive company net sales growth for the fourth consecutive quarter.
Nordstrom, Inc. (NYSE:JWN) has several primary priorities for the year to continue this positive momentum. These include operational optimization, Nordstrom banner growth, and continued momentum growth at Nordstrom Rack. Nordstrom, Inc. (NYSE:JWN) also made substantial progress in its supply chain, reducing operating expenses and expanding its focus to increasing speed. It is prioritizing quick order deliveries to its customers and is moving products efficiently through its network to provide freshness and relevance. For instance, the company’s initiatives for faster delivery of items and fulfillment drove an improvement of more than 40% in the speed of customer returns in fiscal Q3 2024.
4. Tapestry, Inc. (NYSE:TPR)
Number of Hedge Fund Holders: 38
Tapestry, Inc. (NYSE:TPR) operates a global house of luxury brands, including Kate Spade New York, Coach, and Stuart Weitzman. The company is focusing on increasing consumer engagement across its portfolio. It acquired around 1.4 million new customers in fiscal Q1 2025 in North America alone, with all of its brands experiencing an increase. More than 50% of these customers were millennials and Gen Z, reflecting the success of Tapestry, Inc.’s (NYSE:TPR) strategy to recruit younger customers to its brands.
In fiscal Q1 2025, international revenue gains for the company grew by 2% in constant currency, which included a 27% increase in Europe. Tapestry, Inc. (NYSE:TPR) is focusing on fueling product excellence and fashion innovation through quality, creativity, and compelling value. This is reflected in the company’s brands, as Coach delivered continued growth in its handbags in fiscal Q1 2025, supported by AUR gains.
Tapestry, Inc.’s (NYSE:TPR) agile supply chain lends it a key competitive advantage, allowing it to effectively adapt to the evolving fashion landscape. It ranks fourth on our list of the best luxury clothing stocks to buy according to hedge funds.
3. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 45
Founded in 1988, Lululemon Athletica (NASDAQ:LULU) is a luxury athletic apparel, footwear, and accessories brand with around 38,000 employees. It sells leisure-athletic wear and accessories such as socks, bags, and yoga mats that people can use when engaging in fitness activities.
Although the company had a challenging 2024, it has historically performed soundly. Its stock has soared by around 670% in the past decade, which is primarily due to the company’s solid underlying fundamentals. It reported a 19% annualized revenue growth between fiscal Q3 2014 and fiscal Q3 2024. In addition, the company’s diluted earnings per share (EPS) grew at a compound annual growth rate (CAGR) of 21% in the same period, which reflects its profitability potential.
Lululemon Athletica (NASDAQ:LULU) also has significant expansion potential, supported by new store openings and higher same-store sales. It reported a 9% year-over-year growth in revenue through the first three quarters of fiscal 2024, higher than that of fiscal 2023 and 2022. The company holds a competitive market advantage due to its premium offerings, as a key factor in its strategy is to differentiate its offerings from those of its competitors. Lululemon Athletica (NASDAQ:LULU) is also very profitable on a cash basis, generating $417 million in free cash flow during the three quarters of fiscal 2024. It takes the third spot on our list.
2. Capri Holdings Limited (NYSE:CPRI)
Number of Hedge Fund Holders: 57
Capri Holdings Limited (NYSE:CPRI) manages and operates globally popular luxury brands such as Jimmy Choo, Versace, Michael Kors, and others. The Versace segment includes luxury apparel, accessories, and footwear. Jimmy Choo’s segment covers luxury footwear, small leather goods, accessories, and handbags. The Michael Kors segment operates through four retail formats: lifestyle stores, e-commerce sites, collection stores, and outlet stores.
On November 14, the company announced the mutual termination of its merger agreement with Tapestry, Inc. After the termination, Capri Holdings Limited (NYSE:CPRI) is focusing on its future and is solidifying its long-term growth potential through its three luxury houses. Its portfolio of brands boasts strong customer loyalty and heritage, which positions it for long-term success.
Capri Holdings Limited (NYSE:CPRI) also has a solid distribution network to build upon. It has more than 1,200 directly operated luxury retail locations, along with an extensive wholesale network to reach consumers in areas where it doesn’t have its own stores. The company takes the second spot on our list of the top 12 luxury clothing stocks to buy according to hedge funds.
Greenlight Capital stated the following regarding Capri Holdings Limited (NYSE:CPRI) in its Q4 2024 investor letter:
“We increased our position in Capri Holdings Limited (NYSE:CPRI). When the court blocked CPRI’s sale, we suffered a moderate loss. Fortunately, the position was not large. While we expected the merger would go through and we were surprised by and disagreed with the court’s ruling, we recognized the downside risk if the deal broke. When we get an adverse result on an event like this, our instinct is to declare that our thesis has broken and take our loss. After evaluating this situation, however, we came to the opposite conclusion and added to our holdings. During the period when the merger was pending, CPRI’s results were simply awful. Before the proposed deal was announced, CPRI shares traded at about $35, and when the deal broke, the market took the lousy results into account and the shares fell to about $20. Our current thesis is that the interim results were so awful that they likely reflected management distraction, if not neglect. We also believe there is strategic potential for the company’s Versace and Jimmy Choo brands. It should not be difficult for management to re-engage and achieve at least somewhat less awful results. If that happens the shares should stage a recovery.”
1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Nike, Inc. (NYSE:NKE) designs, markets, and distributes luxury athletic footwear, accessories, equipment, and services for sports and fitness activities. The company also designs products specifically for the Converse and Jordan brands. Several of its products are valued at thousands of dollars.
Nike, Inc. (NYSE:NKE) reported a decline of 8% in its revenues on a reported basis and a 9% decline on a currency-neutral basis in fiscal Q2 2025. The company anticipates a slowdown in sales for the next few quarters as it repairs its operations. The company is focusing on scaling back on inventory to build a premium brand and steer clear of markdowns. This strategy is expected to bring Nike, Inc. (NYSE:NKE) back into the game and aid its recovery.
The bull case for the stock is also strong due to the continued growth of the sports industry, with athletes signing million-dollar deals and sports broadcasting booming. According to data from Euromonitor, Nike, Inc. (NYSE:NKE) holds 16.4% of the global sportswear market, with Adidas taking the second place at 9%. This reflects Nike, Inc.’s (NYSE:NKE) strong presence in this growing industry.
The company also saw momentum with positive physical and digital traffic in fiscal Q2 2025. Black Friday week proved to be the largest demand week ever on NIKE Digital, with sales increasing by double-digits. Similarly, 11/11 sales exceeded company plans in Greater China. Fiscal Q2 2025 thus reflected progress in key areas, with the company gaining consumer support.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
Overall, NKE ranks first among the top 12 luxury clothing stocks to buy according to hedge funds. While we acknowledge the potential of luxury clothing stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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