NEW YORK ( Real Money) -- It's not that they don't want apparel, they just want to pay very little for it, at least in this country. That's one of the many things I learned from Craig Jelinek, the chief executive officer of Costco (COST - Get Report), when I visited the company's Harlem store yesterday.
He said apparel was the standout performer of late, and when you look around at his apparel selection you notice that Costco's taken the quality up a notch but really driven down the price. For example, Costco's selling $1,000 Versace handbags for $500. The store just got in some killer Italian ties that look no different from the Ferragamos I wear, for 1/10 of what I pay for the name brand. The Kirkland signature dress shirts are so similar to what I buy at Saks (SKS) you can't tell the difference except they are 1/4 the price.
I have to believe that with 50-million-some-odd members in the United States who are seeking to get their money's worth from their dues, Costco's taking huge share from traditional retailers with these kinds of products. There's enough selection now -- much more than I have ever seen -- and enough famous brands, as well as the Kirkland private-label version, that I think Costco may actually be helping to reorder the apparel universe along with TJX (TJX) and Ross Stores (ROST).
Costco did confound me with its call that televisions are weaker. Could more people be going to Best Buy (BBY) this year now that it discounts so effectively? But Jelinek did say that tablet sales are very strong, so it isn't a revulsion to hardware.And I don't want to draw much of a conclusion from Costco about PVH (PVH) and V.F. Corp (VFC). They've become big international companies that are more levered to overseas than to here. But still, you can see Costco really giving Macy's (M) and Neiman Marcus and Nordstrom (JWN), not to mention J.C. Penney (JCP), a real run for their money. I think it's a game changer and it simply isn't getting talked about enough considering the power and reach this membership wholesaler has in this country. Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long COST and TJX. Editor's Note: This article was originally published at 7:54 a.m. EDT on Real Money on Nov. 1.