Dirty Retail Secret

Some of you know this, while most of you suspect this. The designer brand name clothes you buy at outlet mall stores were most likely never sold at full retail price in a store. It's retailing's not-so secret dirty secret.

According to a BusinessWeek article, as little as 10% of the designer brand name merchandise sold in outlet stores was actually on the shelves of an upscale retailer.

At Off 5th stores from Saks Fifth Avenue, only 10%-to-20% of the merchandise comes from Saks markdowns. Which means, about 80% of the merchandise is made by vendors solely to be sold at Off 5th stores.

Same thing happens at Nordstrom Rack outlet stores, where up to 75% of the merchandise was never sold inside a Nordstrom store.

While many of us during this recession have decided to do more shopping at outlet malls, the goods we've gotten might not be the goods we thought we were getting. Just thought you should know this dirty retail secret.

Comments

[Nathan Gilliatt]

Part two of the secret is that (some of?) the brands make a lower-quality product to hit the outlet price point. Caveat emptor.

[john moore (from Brand Autopsy)]

Nathan ... yep, to hit the outlet store lower price point high-end (and low-end) retailers must make compromises and that usually means making/selling lower-quality product.

[Mark Tomkinson from Ech0 Creative]

In my dim and distant past i work at a "Top London Designer". It was common practice to buy in from Japan t-shirts at £1 each, sew in the brands label and then sell them back to Japan to retail at £80 each.

One of the reasons I left that industry to be honest.