Medium has a story today on the less-than-honest business practices of discount and outlet stores. An excerpt:
Despite common belief, outlet clothing never enters a “regular” store and is most likely produced in an entirely different factory than the “regular” clothing. A few months ago I met with some people from Banana Republic Outlet. Banana Republic has a team of people whose sole responsibility is to design and manage production for their outlet stores. Their production team was looking for new ways to diversify their outlet product-line in order to compete with H&M and Zara. It is rumored that these huge retailers have such agile supply-chains that they are able to bring new product to their stores every 2 weeks. While Banana Republic and J.Crew are not trying to compete on price with H&M, their outlet counterparts must. This means that these companies produce lower cost and lower quality clothing specifically for their outlet stores.
TJ Maxx, known for it’s off-price designer labels, finds itself in a similar position. Ever notice that TJ’s will have a surplus of Calvin Klein, or Rachel Roy, or Elie Tahari clothing? This happens when TJ Maxx brokers a licensing deal with one of these brands. In this situation, the brand (ex: Calvin Klein) agrees to let TJ Maxx produce clothing with their label on it in return for a percentage, usually between 5-20% of the wholesale price of the garment. To put this in perspective, in 2012 Calvin Klein reported that “licensed products currently represent slightly over 50% of global retail sales.” At that time, licensing alone accounted for more than $3.8 billion in CK sales.
Licensing can be a great situation for the brand because they do not have to manage sourcing, production, or shipping. TJ Maxx, or the licensee, manages all of the nitty-gritty stuff, and makes the product in their factories at prices that they control. Then, they put the reputable brand label on the clothing and write that company a check. These branded garments end up at discount retailers and consumers buy them thinking that they’ve just scored an awesome Calvin Klein blazer.
More shady practices from fashion retailers. While JC Penney has been busy dealing with a lawsuit that claims they hold fake sales, Michael Kors just agreed to pay $4.88 million dollars to settle a lawsuit accusing them of using deceptive price tags. Specifically price tags at their outlet stores, which were artificially marked-up in order to fool customers into thinking they were getting big bargains. Business Insider has the story:
Michael Kors was accused of creating an “illusion” of deep discounts by using tags containing made-up “manufacturer’s suggested retail prices,” or MSRP, and offers to sell the products at lower prices, termed “our price.”
Shoppers said the suggested retail prices were artificial because the tagged products had been made exclusively for Michael Kors outlets, and the London-based fashion house never intended to sell them at those prices.
As part of the settlement, Michael Kors will replace “MSRP” with “Value” on its price tags and display signage explaining that term, or stop using reference prices for products made exclusively for its outlets.
Reminds me of something a designer at a big suit manufacturer once told me: apparently outlet stores sometimes use phrases such as “compare to” instead of “marked down from” in order to skate these fine legal lines. Yes, you can compare this $200 suit to this $2,000 suit sold by the same label, but that doesn’t mean it’s been actually marked down from that price. Just another example of brands making lower-quality items exclusively for outlets, but selling them as though they’re out-of-season stock.
The Powerqube is a multi-port USB Charger and power strip that allows you to simultaneously charge up to nine devices. Well, that’s three USB charging ports and six electrical outlets, but if you have chargers then it’s as good as nine USB charging ports.
Started installing #wiring for #electrical today in what will be the #remodeled #kitchen space. Putting careful consideration in this #renovationproject into number and location of all the #outlets. #lighting will be on #dimmer #switches to add ambience ( and maybe even save some $$ along the way by using less electricity!) #remodel #kitchenremodel #renovation #demolition #contractor #build #framing #realestate #property #fixerupper #lightingdesign #design #southwestremodel Follow my posts on Instagram and Twitter for details on our remodeling journey, #photos and #homeimprovement #tips along the way…