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Outlet Merchandise Origin and Quality

Outlet Merchandise Origin.

Where does the merchandise at outlet stores come from? How can the outlets sell it so cheaply? And how does outlet quality compare to retail? Those questions have different answers depending on the company (see table below). Linda Humphers, editor in chief of Value Retail News, illustrated this point by painting us a picture of three different brands.
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"Nike's goal has always been to use outlet stores as liquidation for anything left over from their wholesale accounts, though they have begun manufacturing T-shirts for their outlets to fill out stock," she said. "Bloomingdale's doesn't make anything specifically for their outlet stores, but they manufacture more of certain items. These items go directly to the outlet store, and you will find them in regular stores as well. Brooks Brothers manufactures 100 percent of their outlet merchandise for the outlet."

Companies that stock their factory stores with retail merchandise can often afford to sell it for less because they're cutting out the middle man and going directly to the consumer. Samsonite is able to offer higher-quality merchandise at its company store than it does through retailers such as Macy's and still keep prices affordable. The luggage manufacturer and other brands such as Carter's also may carry a wider selection of products than their retail partners.

(Article continues after table.)

OUTLET WHAT YOU'LL FIND
Gap
Separate line of made-for-outlet apparel.
Banana Republic
Separate line of made-for-outlet apparel.
Gymboree
Reproductions of retail kids' clothes from previous seasons that have been altered for the outlet, as well as made-for-outlet pieces.
Carter's
The same current-season baby clothes sold in department and big-box stores, plus additional sizes and a larger selection.
Kate Spade
Primarily made-for-outlet accessories but also some sale and liquidation items from retail stores.
Coach
Primarily made-for-outlet leather goods but also some sale and liquidation stock from retail stores.
Restoration Hardware
Dented, dinged, and special-order furniture at a discount. Also liquidation stock from retail and some made-for-outlet goods.
L'Occitane
Discontinued retail lines and full-price retail lotions and soaps.
Samsonite
Current-season luggage and products from other global markets, some that are carried at retail and some that are sold only at company stores. Quality may be better than retail.
Le Creuset
Current line of retail stoneware and so-called "second quality" cast-iron products. Also discontinued colors and some full-price merchandise.
Calphalon
Open stock (sold individually without packaging), overstock, and slightly damaged cookware.

Some stores ship sale items, overstock, and unpopular or out-of-season goods to their outlets. Those items are already reduced when they arrive and go through additional markdowns until they sell. Few stores rely solely on liquidation stock, but Restoration Hardware and L'Occitane carry a lot of it. Kate Spade and Coach also receive some liquidation merchandise from retail stores. Tommy Bahama stocks its outlet stores with unsold clothing from the previous year.

Many retailers make product lines specifically for their outlets -- typically previous-run styles that are tweaked to make them less expensive. "A lot of shoppers like the styles these brands have but can't afford the full-price item," Humphers said. Retailers respond with modified products that cost less to make but put the label within reach of cash-strapped shoppers. Banana Republic, Gap, and Gymboree all sell just-for-outlet clothing.

Outlet Quality.

A given brand's outlet merchandise doesn't always match the quality of the retail product line. This is especially true where made-for-outlet products are concerned. Brand manufacturers cut costs by downgrading materials or skipping extra embellishment, which lets the outlets sell the items for lower prices. Jordan Speer, editor-in-chief of Apparel Magazine, told us that companies will "reproduce a style but shave things off that would render it pretty much the same. They remove a button here or there, or use fabric that is a little cheaper but still looks the same." For instance, Coach may forgo extra details such as embossed fabric coating and decorative hardware. That doesn't mean the outlet quality is bad, however. It simply means you get what you pay for.

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User reviews are mixed when it comes to how made-for-outlet items compare to retail. One California outlet shopper posting on Yelp says the caliber of the Banana Republic work clothes she buys for her husband is higher than she expected. Another shopper on Yelp finds the quality at the same Banana Republic outlet inconsistent, especially when it comes to women's styles.

A patron of a Gymboree outlet in Massachusetts complains on Yelp that two dresses purchased there didn't hold up in the wash, while a Yahoo contributor has been satisfied with the quality of most items at the Gymboree outlet, particularly accessories. The Coach factory store, which sells both made-for-outlet and discounted retail products, consistently earns praise from consumers, such as this shopper posting on Yelp, for offering well-made merchandise.

The outlet quality issue is something retailers like to gloss over. When we approached salespeople as a customer, they were forthcoming about where outlet merchandise originates. However, they were noticeably hesitant to discuss quality differences on the record. We made multiple attempts to contact the brands mentioned in this article by phone and e-mail, but not one company responded to our formal interview requests.

Although made-for-outlet items may be constructed with lesser materials or fewer details, the quality is still generally good overall. Retailers wouldn't put their labels on such items otherwise, Humphers pointed out. "Most every brand wants to do a good job with their outlet goods because it affects their brand image," the Value Retail News editor said.

Some outlet apparel may not last as long or wear as well as a regular retail item would, but that might be fine if it's a trendy piece with a limited shelf life or a children's item that will be quickly outgrown. After all, it cost less in the first place.

by Gina Briles (Google+ Profile)

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