Racked:
Neiman, Nordstrom, Bloomingdale’s, Barneys New York, and Saks Fifth Avenue all have their own outlets; customers flock to these stores for the brand-name cachet and believe they’re shopping last season’s carefully curated inventory. However, this isn’t exactly the case.
Nordstrom Rack, for example, confirms to Racked that only 20% of what it sells is clearance merchandise coming from their stores and website, while the rest is bought expressly for the outlet.
I’ve gone to dozens of outlet stores and malls, sometimes involuntarily, and I’ve always thought they were a little bit fishy. Turns out, many are.
Well if you can’t afford the real thing, the real thing made of cheaper quality isn’t that bad.
True but as the article says, many of the items aren’t “outlet” but cheaper goods specifically made for the outlet store. That’s disingenuous at best.
So they’re selling cheaper goods for cheaper and labeling them accordingly. How is that disingenuous? It’s quite easy to tell the straight to outlet and the overstock stuff apart (look at the “Made in …” tag). Also, most (all?) of the brands have specific labels for outlets. If you’re at Brooks Brothers, the “346” brand is the outlet exclusive brand, while the non-346 stuff is real. For Michael Kors purses, the “MK” purses are outlet, the ones with “Michael Kors” in full are overstock. This is no different than what brands like Ralph Lauren do in regular retail. Purple Label is high end (and priced accordingly), green label is cheap crap, blue label is in between (the made in Italy stuff is good, the rest is uneven).
These tactics began innocently many years ago.
One of the first consulting projects I ever worked on was for L.L. Bean. It was an Electronic Data Interchange-based order status tracking system. The work took place in the early 1990s.
One day I was in a meeting with managers, going over some data from a “department” table that indicated who placed an order we were tracking. I looked over the list, and I remember saying, “Wait a minute. Why is ‘Outlet Stores’ listed as a department that tracks orders they’ve placed?”
The manager who answered said, “Well, the Outlet may have some overstock pants that came from one of our Retail Stores or the catalog because the style didn’t resonate with our customer base.”
“We’ve found that we can’t just sell pants to some outlet store shoppers. They want to put together an outfit. So, sometimes we have to order shirts that coordinate with pants that are overstocks coming from retail or the catalog.”
This was a totally logical answer that made complete sense to me as someone who was exposed to Bean’s core values at that time. No doubt this is a slippery slope for some companies in the fashion industry.
The really dubious assumption implicit in the article is that the regular department store merchandise is extremely high quality to begin with.
Better than the outlet stuff at least. I shop at J.Crew occasionally and while their regular stuff is pretty good quality, their outlet stuff is usually crap that can’t withstand more than a season’s worth of wear. Bad thing is, they make it very very difficult to tell which is the real brand and which is not.
Not all retailers make it that obvious, and even then, you have to be in the know. I’ve never heard of “346” or which label Ralph Lauren is supposed to be good, but JCrew makes it nigh impossible to figure it out.
hey don’t forget RL black label. they’re all explained by RL here:
http://www.gq.com/style/suit-guide/200501/ralph-lauren-black-label
agreed w/ bail — while all brands differ, much of this stuff is just cheaply made, inexpensive, asian-produced factory fashion.
theres a reason half of the inventory at retailers like Banana Republic is on sale or marked down — the regular prices are nonsense. the full price is extremely high margin, for the “early adopters” who don’t care. then the sale prices are still normal margins. its the sort of shenanigans Ron Johnson tried to put an end to at JC Penny but people freaked out thinking they were “losing” their sale prices.
Same with dollar stores. That isn’t unwanted/damaged crap they got from some place. They actually make that crap to sell in their stores.
RL has about 8 lines. I baiscally chose a good, bad and medium line.
http://thisfits.me/post/589987463/sf-ralph-lauren-lines-and-who-makes-what-a
I’m a clothes horse (a big chunk of my dot com boom stock sales went to fund a fairly serious Armani habit) and if you’re a regular in a Saks Fifth Avenue or Neiman Marcus, it takes about 30 seconds in a “Off Fifth” or “Last Call” to realize that most of the stuff in there is NOT from Saks or NM. That being said, when they do get shipments in from the store it’s a goldmine, especially if you’re a size on either extreme or are shopping cross-climate (i.e. I once scored a cashmere/wool Armani black label full-length overcoat for almost 90% off at a Last Call in San Diego).