The Gap, Inc. (GPS)

As one of the few with an outperform on this, I guess I should explain why I like this one star wonder:

1. Gap realized they had a problem long before a lot of their competitors and had begun making changes prior to the world waking up to the "consumer is tapped out" reality. I'm not saying they identified this trend on a macro scale, but consumers not stopping by and saying "hi" was already affecting them on the micro scale long before it was affecting everyone else.
2. The founding family appears to be taking a much more active role than they did over the last decade. They don't like where outsiders took their company and are now trying to fix it.
3. I think Gap will become trendy again BECAUSE of the recession. They provide time tested fashion with name brand recognition at affordable prices. Humans being what they are, they will still want the assurance of a brand behind their purchases. No doubt quite a few folks will be kicking it in their Toughskins, but those that can afford the few extra dollars will buy up to a quality brand just to show they can. Spending $80 extra for a designer item is a far greater leap than spending $10 - $20 extra for something at the Gap rather than Wal-Mart or Target.

I think that if Gap can overcome the hurdle that poor decisions over the last decade have put in their way, they will be in a prime position to benefit from the coming contraction. With the family more actively involved and the experience gained in bringing this company into the limelight during the early 90s recession, I think they have a very good chance in succeeding.