Smart Fashion Stocks Change Their Stripes

This column was originally published on RealMoney on May 31 at 12:02 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Is the intellectual property of apparel, the brand of apparel, beginning to win out over the stores that sell it?

That's what I am pondering as I watch Ralph Lauren(RL Quote) and VF Corp.(VFC Quote) go up endlessly, even as the stores that sell the products go sideways or down.

In a Wall Street Confidential video this morning with the always excellent George Moriarty, I found myself making the analogy to when the balance of power between the PC makers and the insides of the PCs -- Microsoft(MSFT Quote) and Intel(INTC Quote) -- shifted in the 1990s. The brand and the gross margins had been going to the assemblers, the Dells(DELL Quote), the Gateways(GTW Quote), and it shifted to the insides because the key intellectual property was based on those two suppliers.

Now, with the incredible new products from Ralph Lauren -- including this American initiative at Penney's(JCP Quote) and the Chaps work at Kohl's(KSS Quote), I am beginning to believe that the power, the gross margin, is shifting in Lauren's favor. It has already shifted to VF courtesy of its excellent proprietary brands and its jettisoning of its commodity bra brand, which can be so-called "footballed" by the retailers.

That's why Lauren is up huge today. This transference could lead to much, much bigger gains than we have seen from these two players. I said on Wall Street Confidential that it would not shock me to see these stocks go up 30 to 40 points over time as this trend is recognized. That's what happened with Intel and Mr. Softee.

I think it is happening again.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.