On Wednesday's Mad Money, Jim Cramer interviewed VF Corp's (VFC) Eric Wiseman, whom he referred to as one of the best CEO's in retail.  With his stock up more than 30% year to date, we doubt there would be much of an argument from the shareholders.  This is one company that flies under the radar for a lot of investors because of the somewhat bland name, but under the surface VF Corp. has some of the most well known brands in apparel.  VF Corp. has acquired such brands as Lee, Wrangler, North Face, Nautica, Reef, Vans, and most recently the popular jeans maker Seven for All Mankind.

So, what makes Wiseman and VF Corp successful?  Inventory control has been a huge emphasis for Wiseman and the company has substantially lowered its inventory over the last year.  This inventory management is huge for VF because it necessitates less discounting which translates to better profit margins. Profit margins have been trending downward for the last few years, and are something that Wiseman wants to address and he set out at the beginning of the year to draw down inventory by $100 million, which he says is on track. The slimmer inventory is also better for free cash flow purposes as well. However, because VF Corp is a supplier for many department stores they do not have complete control over inventory.

VF Corp only buys brands that it thinks have explosive growth potential, and one way that they are seeking to expand sales is to look overseas. There push into Asia has been particularly successful with sales in that region up huge, 32%. Domestically, sales are slumping somewhat, but Wiseman told Cramer that the reports of horrendous back to school shopping have been overblown. In fact, he expects September numbers will be a better indicator of back to school shopping than August was because of the later than normal Labor Day holiday weekend.

Cramer loves the optimistic leadership of this company and thinks it would be an excellent way to play the recovery in consumer spending. However, at Ockham we have a slightly more cautious view of this stock and the retail industry. As for the stock, we have a Fairly Valued valuation at present, and based on historical valuation ranges with think the stock is trading right inside of our rationally expected trading range of $68 to $85. Earnings estimates have been climbing and the overseas growth is appealing; however we will have to see further strengthening in fundamentals in order for this stock to look undervalued. Furthermore, as we wrote earlier today (Record Credit Card Defaults Signals a Weaker Recovery), consumers are showing more signs of strain after 5 months of improvement. In this sort of environment, it is tough to stand behind a stock so tied to spending on luxury items or department stores, especially considering the stock's run this year.