These names are retail winners, hedge fund manager says

Consumer spending elsewhere: Pro
Consumer spending elsewhere: Pro

The retail sector was slammed on Tuesday after several retailers reported downbeat earnings. However, hedge fund manager David Berman said there are some winners to be found despite the sector being in "secular decline."

That's because although traditional retail is weak, the consumer is still spending.

"People are spending in other areas, like the Internet," he told CNBC's "Power Lunch." "They're also spending more time on social media and things like that which is taking away from shopping at the mall."

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In fact, three companies—Samsung, Apple and Amazon—make up 43 percent of the total sales growth in America, he said.

Berman, who said he owns shares of Amazon, didn't specify whether he owns the other two names.

A woman carries a Sephora shopping bag while looking at dresses for sale at the Third Street Promenade in Santa Monica, Calif., May 12, 2014.
Patrick T. Fallon | Bloomberg | Getty Images

Amazon is the "Wal-Mart of our generation," he said. "They are just doing everything right. Their sales are growing much higher than the reported numbers look." He also likes Apple.

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Athletic names such as Nike, Sketchers and Columbia Sportswear are also doing well, Berman added.

"If you notice those winners, they're more brand names. They are not really competing against the Internet" like traditional brick and mortar retailers, he said.

Names like Staples, TJX, Urban Outfitters, and Dick's Sporting Goods were all hammered on Tuesday.

Staples, facing competition from online retailers and mass merchants, predicted a drop in sales in the current quarter. T.J. Maxx cut its full-year earnings forecast, Urban Outfitters' quarterly profits were below analyst expectations, and Dick's Sporting Goods' current quarter earnings fell below estimates. The sporting goods chain also reduced its full-year adjusted earnings and same-store sales growth outlooks.

Read MoreStaples forecasts fall in sales

Berman, who predicted a terrible third quarter for retail in 2013, expects more bad news when additional retailers report in the next week or two.

"We're in a secular decline in retail," he said. "We're going to get horrible numbers again."

—By CNBC's Michelle Fox