Apparel is a tough world, and it all starts with the customer and then rolls downhill.

Stores like Wal-Mart (NYSE:WMT), Urban Outfitters (NASDAQ:URBN), and Nordstrom (NYSE:JWN) may give shoppers a shiny, happy experience, but they can be beastly difficult to deal with on a supplier-customer basis. Tough negotiators coupled with sometimes fickle fashion trends can make life a lot more interesting for the likes of Perry Ellis (NASDAQ:PERY) than they might otherwise prefer.

In its third-quarter financials, there was both good news and bad news for this well-known collection of clothing brands. Sales were up 37% as reported, but organic growth was all of 3%, and there was a very slight decline in royalty income. Margins, though, eased off, and earnings per share were up all of 11%.

Making matters a bit more dicey, Perry Ellis' management lowered its revenue guidance for the fiscal year. With that, the company sounded a bit of a warning call about the state of the retail apparel market. We've all heard the substance of this before -- higher energy prices, higher interest rates, etc. It's the same hoodoo we've been hearing about retail for a while, even as companies like Wal-Mart and Abercrombie & Fitch (NYSE:ANF) march merrily onward. From where I sit, market demand is still quite strong if you have the goods people want to buy.

While Perry Ellis looks pretty cheap on a P/E basis, I'm in no great hurry to recommend the stock. There's a lot of debt here, and low organic growth means that the company will have to continue to acquire brands to build the business. There are also some corporate governance issues that make me a little less than completely comfortable. With no shortage of other retail/apparel ideas out there, I'd strongly suggest that Fools do some thorough due diligence before suiting up with Perry Ellis.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).