The retail sector continues to be a difficult place in which to make money and requires careful attention and monitoring. There are trades to be made, but you need to be selective.

Discount stores are faring well, but what has been impressive has been the performance of the upper end luxury retailers and some of the niche players in the retail sector. You can buy Wal-Mart Stores, Inc. (NYSE/WMT), up 17.56% over the past 52 weeks, or Target Corporation (NYSE/TGT), up 16.30% over the past 52 weeks, but there are much better returns in the retail sector.

It’s not a dark secret that the world’s rich are getting richer and have the money to spend in the retail sector.

But if you don’t have the $2.4 million to buy the “Bugatti Veyron Super Sports” edition (assuming you can get one) that can get you to 60 miles per hour in an inspiring 2.5 seconds and with a top-end speed of 267 miles per hour, there are alternatives.

You can buy a top-end “Porsche” for under $200,000 or “Ferrari California” for $192,000.

Or you can buy the poor man’s supercar, the “Corvette,” for $60,000, from General Motors Company (NYSE/GM). The Chinese certainly seem to love GM cars, as I discussed in General Motors: China’s Top Foreign Automaker.

The reality is that, despite the economic renewal and continued growth global growth concerns, there is still a lot of money out there for the rich to pamper themselves.

Luxury jeweler Tiffany & Co. (NYSE/TIF) beat earnings per share (EPS) estimates in three straight quarters, but reported a small miss in the recent fiscal fourth quarter. However, take a look at the Q4 worldwide sales growth of 18% year-over-year to $3.6 billion, which is astounding in my view. The key comparable store sales surged 13% year-over-year, which is impressive.

In the upscale retail sector area, another key performer is popular accessories retailer Coach, Inc. (NYSE/COH)—expected to see sales growth of 15.40% and 12.80% in fiscal 2012 and fiscal 2013, respectively. The stock rallied 48.62% over the past 52 weeks.

You also have up-and-coming high-end clothing retailer Michael Kors Holdings Limited (NYSE/KORS), which is estimated to report sales growth of 29.90% in fiscal 2013. The stock debuted on December 15, 2011, but has already nearly doubled in price in four months. Based on the operating results, this could be a special stock going forward.

Michael Kors posted a 68% year-over-year jump in its fiscal third-quarter revenues to $373.6 million versus $222.5 million in the year-earlier fiscal third quarter. The jump is amazing given the uncertainties in the retail sector. Moreover, the key comparable same-store sales surged a superlative 38% in the quarter, which is simply astounding in the retail sector.

The key to investing in the retail sector is to search for companies that offer some sort of niche or product that is different from its competitors’.

The luxury retail sector stocks are a niche that has a growing target market with the newfound riches in the BRIC countries (Brazil, Russia, India, and China). These stocks tend to have strong global brand awareness and are sought after by the new rich and old money.