NEW YORK (TheStreet) -- "One minute you're in, the next you're out," Heidi Klum says in Project Runway.

That's a fashion and retail concept many in the securities business just don't get. And investors would be wise to understand the fickle nature of the fashion world, where an upstart can topple a well-known brand in a matter of months.

That's why



shareholders were caught by surprise with the drop in the company's stock and the rise of

Michael Kors


. Simply put: Coach is out, Kors is in.

You can rattle off all the numbers you want about Coach -- I hear the same ones with


(TIF) - Get Report

too. Store expansion, China, new styles, etc. But it doesn't change the fact that Coach is out. It is no longer aspirational. Who doesn't own a Coach bag -- or two or three? Coach is for sale at outlet stores with inexpensive versions of its own quality product, which obviously cheapens the brand.

One thing about luxury goods is that the buyer perceives she is getting something special. Coach is no longer special. Kors, however, is. The handbags aren't priced like Gucci or Vuitton, so it is accessible, but consumers feel that buying a Kors bag is a step above Coach. That is why the stock of Kors is doing so well and Coach isn't. It has nothing to do with quality or the numbers -- it's fashion. The fact that Kors is now worth $12 billion and was one of the top 10 IPOs of 2012 has hungry investors shopping around for the next Michael Kors.

The next Kors is Tory --

Tory Burch

. Tory Burch, for the uninitiated, is preppy. Burch grabbed women's attention with a ballet flat decorated with the signature "T" logo, and it went from there. The company is now worth over $3.3 billion. Founder Tory Burch's 28% stake is said to be worth $935 million.

Ralph Lauren

(RL) - Get Report


Tommy Hilfiger

(PVH) - Get Report

are classic preppy, but neither have the feminine flair that has made Tory Burch so popular. The company hasn't filed for an IPO, but that is mostly because of a nasty divorce between Tory Burch and Christopher Burch that was resolved in 2012. Mr. Burch owned too much stock and had too much say, even though the couple was separated. Tory Burch is now free to move forward and the IPO market is salivating.

Jason Wu

. Why not? This designer has clothes, shoes and handbags. He's in major department stores. He's designed a hit line for


(TGT) - Get Report

and First Lady Michelle Obama has worn his clothes. There is Jason Wu eyewear and a Jason Wu candle for NEST fragrances. He's also designed bath faucets for the Brizo collection. Fashion expert Brendan Cannon of The Cannon Media Group said: "Jason is on the cusp of American greatness. The Target deal solidified him as a major player."

Cannon went on to say that Wu has risen very quickly since being chosen by Mrs. Obama and has proven himself as an exciting designer. "His fashion shows are on the level of European fashion, while his Miss Wu line is accessible," Cannon says. You will hear a lot about Jason Wu, so put that name on your radar.

Kate Spade

came before Tory Burch, but she got bought by Liz Claiborne, which then changed its name to

Fifth & Pacific


. Kate Spade is now the fastest-growing segment for this company, which also owns Juicy Couture and Lucky Brand.

Net sales for the third quarter of 2012 jumped 35% from a year earlier. It would make perfect sense to spin off Spade and unlock that value. In fact, the company makes a habit of selling off pieces. It sold Dana Buchman to


(KSS) - Get Report

and Liz Claiborne licensing to

JC Penney

(JCP) - Get Report

. The company also sold the Kensie line to Blue Star Alliance in 2011. Plus, spinoffs performed well in 2012. Of the 146 IPOs, seven were spinoffs and, with the exception of LinnCo and WhiteWave Foods, all enjoyed double-digit performance.

The only problem may be that Kate Spade is now straying from its original "look." Cannon says the company is going in a different direction to drive sales. Maybe Fifth & Pacific should change its name back to Kate Spade if it doesn't spin out the company.

The Olsen twins

. Forget about child stars from

Full House

, this is a fashion powerhouse. The girls have a couture line called The Row, Elizabeth & James, Stylemint and the new Olsenboye line at JC Penney. A perfume is set for this spring. The twins are also creative directors for Superga, an Italian shoe brand. They stumbled with a line at Wal-Mart for teens that reduced their fashion cred, but they recovered by consistently delivering a high-end product. Their message was that this wasn't a vanity project and they truly believed in the rag trade. Cannon agrees. "They don't need the money, and they really are doing this for a love of fashion." However, everyone has their price, and if the bankers come knocking, they may well answer.

Jessica Simpson

. Laugh all you want, but this is the first celebrity line to cross $1 billion in sales. The license is owned by The Vince Camuto Group, a private company based in Connecticut founded in 2001. "Jessica Simpson filled a void. Her line has cute shoes at a very affordable price," Cannon says.

Camuto created Nine West and turned it into a $2 billion business. He also makes Tory Burch shoes. Camuto partnered with

The Jones Group


to make Jessica Simpson clothes, and Jones reported that fourth-quarter net sales increased 56% from a year earlier and a plus-sized line will roll out for spring. Camuto has a long relationship with Jones: He sold his original Nine West to the company for $2 billion in 1999. If Vince Camuto doesn't spin out Jessica, then maybe he should go public. Ralph, Tommy & Vince, the three amigos.

-- Written by Debra Borchardt in New York

>To contact the writer of this article, click here:

Debra Borchardt


Follow @WallandBroad

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.