What is a direct-to-consumer (DTC) business model?

A direct-to-consumer business model means a brand sells its products directly to customers through its own channels like websites and branded stores, rather than primarily through third-party retailers. This approach gives companies more control over pricing, customer relationships, and profit margins. For apparel brands, strong DTC operations can provide a buffer against economic challenges like tariffs because they don't have to share profits with middlemen and can quickly adjust their strategies based on market conditions.

Why are tariffs a concern for apparel companies?

Tariffs are taxes imposed on imported goods, and they're a concern for apparel companies because many manufacture their products overseas. When tariffs increase, companies face higher costs for bringing products into the country. This leaves them with tough choices: absorb the costs (hurting profits), raise prices (potentially losing customers), or relocate production (which takes time and investment). Brands with strong customer loyalty can better weather tariff pressures because their customers may accept higher prices or continue buying even during economic uncertainty.

What makes a brand "resilient" during economic challenges?

A resilient brand can maintain sales and protect profits even during economic downturns or challenges like tariffs. Key factors that contribute to brand resilience include strong customer loyalty, pricing power (ability to maintain or raise prices without losing customers), diversified sales channels, control over distribution, and efficient inventory management. Apparel companies with iconic brand recognition and robust direct-to-consumer operations typically show greater resilience because they have deeper customer connections and more flexibility to adjust their strategies quickly when facing headwinds.

What's the difference between these companies and regular retailers?

While traditional retailers primarily sell products from multiple brands in their stores, the companies in this group design, market, and sell their own branded products. They control their entire value chain from concept to customer. Many operate their own e-commerce platforms and branded retail stores (direct-to-consumer channels) alongside selling through wholesale partners. This integrated approach gives them advantages in margin control, customer data collection, and brand experience management. During challenging economic periods, this model can provide more stability than traditional retail, which depends heavily on foot traffic and often faces intense price competition.

14 handpicked stocks

Resilient Apparel Brands

This carefully selected group of apparel stocks features companies with powerful brand loyalty and strong direct-to-consumer sales channels. Handpicked by professional analysts, these brands are positioned to thrive even when facing economic headwinds like tariffs.

Han Tan | Market Analyst

Published on July 11

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Nike, Inc.

NKE

Current price

$74.57

As a global icon in athletic apparel with a massive and growing direct-to-consumer business, Nike is well-positioned to replicate Levi's success in us...

As a global icon in athletic apparel with a massive and growing direct-to-consumer business, Nike is well-positioned to replicate Levi's success in using brand strength to navigate economic challenges.

Lululemon Athletica Inc.

LULU

Current price

$178.20

Lululemon's powerful brand loyalty and primarily direct-to-consumer model make it a prime example of a company that can maintain premium pricing and d...

Lululemon's powerful brand loyalty and primarily direct-to-consumer model make it a prime example of a company that can maintain premium pricing and demand despite broader market pressures.

Deckers Outdoor Corp.

DECK

Current price

$102.79

Owner of the iconic UGG and HOKA brands, Deckers has a strong and profitable DTC segment that allows it to control pricing and customer relationships,...

Owner of the iconic UGG and HOKA brands, Deckers has a strong and profitable DTC segment that allows it to control pricing and customer relationships, similar to Levi's.

V.F. Corporation

VFC

Current price

$15.28

Kontoor Brands, Inc.

KTB

Current price

$82.58

PVH Corp.

PVH

Current price

$82.68

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+38.87%

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About This Group of Stocks

Our Expert Thinking

Strong brand identity and direct-to-consumer channels help apparel companies weather economic storms. Just as Levi Strauss raised forecasts despite tariff pressures, these companies can maintain pricing power and customer loyalty when market conditions get tough.

What You Need to Know

These companies control their own destiny through e-commerce sites and branded stores, reducing dependence on traditional retailers. This strategy provides better margin control, inventory management, and pricing power, creating a defensive advantage during economic downturns.

Why These Stocks

Each company was selected for its iconic brand recognition and significant direct-to-consumer presence. Our analysts identified businesses that mirror Levi's successful strategy, with the potential to protect margins and grow sales even when faced with external economic pressures.

Group Performance Snapshot

38.87%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 38.87% over the next year.

9 of 14

Stocks Rated Buy by Analysts

9 of 14 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🛡️

Recession-Resistant Potential

These iconic brands have shown they can maintain customer loyalty even during economic downturns. Their direct-to-consumer focus gives them extra protection against market volatility.

🔄

Control Their Own Destiny

Unlike traditional retailers, these companies can adjust pricing, manage inventory, and connect directly with customers. This flexibility could help them navigate supply chain issues and tariff pressures.

🌟

The Levi's Effect

Levi Strauss showed that strong brands can thrive despite tariffs and economic headwinds. These companies share similar characteristics, positioning them to potentially replicate this impressive performance.

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