In this episode, we share the history of outlets and why you might not be getting the deal you think you are.
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Read the full episode transcript below! – Ep 42 Office Hours Are Outlets a Good Deal?
Today’s episode of Office Hours is sponsored by Holding Hangers. Each week, I’m hearing from ladies who thought I was crazy to be this excited by hangers but trusted me anyway and took the plunge. Now they’re converts who love them just as much as I do. Holding Hangers are truly different, and if you’re looking for a better way to hang your items like pants, skirts, and off the shoulder tops and dresses, check out Holding Hangers. No more wrinkles, no more crease marks, no more annoying loops in your tops, just an, organized closet with ready to wear clothes.
Everyday Style School listeners can take 15% off their first purchase by going to holding hangers.com and using code STYLE15. That’s STYLE15 in all caps.
Welcome back to Office Hours–the weekly show of the Everyday Style School podcast, where we answer one question, submitted by one of you lovely ladies, to help make style easier, and getting dressed more fun.
Today we’re discussing Outlet Stores, and whether or not they’re a good deal
Just like the last episode of Office Hours, this week’s question came about in a conversation, and honestly, I had no idea people didn’t really understand what outlet stores, and increasingly, off-price stores, are all about these days. But, since 3 out of the 5 women I was talking to thought that Outlet stores were something totally different than what they really are, the question earned a spot in Office Hours.
Before we dive in, when I say outlet stores, I’m talking about the stores you see at Outlet Malls, that usually have the word Outlet or Factory after their name–the Adidas Outlet, Gap Factory Store, etc…
When I say off-price stores, for the purposes of this conversation I’m talking about Nordstrom Rack, TJ Maxx, Marshalls, and so on and so on.
To understand what these stores are today, you have to understand what these stores used to be.
Originally, factories had a shop attached to the factory, where they sold overstock, and imperfect items at a discount first to their employees, and then to the general public. These shops were called Factory Outlets. They were kind of bargain treasure hunts, but you had to be ok with a color that didn’t go over well, or a sweater with a little hole in it.
You were never going to find perfectly made, basic black pants in popular sizes in a factory store. Original factory outlets were the land of misfit toys, basically.
In the ’70s, companies that owned a few brands grouped their factory outlets together, and the first outlet malls were born. These were still overruns, offseason, and flawed merchandise.
Alternatively, some brands sent their overstock to off-price retailers like TJ Maxx. Again, these were bargain treasure hunts. You’d find one of a kind pieces, not full-size runs, or different colorways in a single piece.
In the 80s and 90s, retail development and management companies further consolidated outlets, by creating outlet malls that featured lots of different brands that weren’t necessarily owned by the same company, such as Gap, and Adidas. It’s really here that Outlet Malls started to change.
Factory stores went from one or two locations, where brands could consolidate their overstock and fill a whole store, to hundreds of locations that needed merchandise. Retailers actually needed to create an inventory to fill the stores. Think about this for a minute.
If there was enough clothing leftover from a single season of Gap, let’s say, to stock a couple of hundred stores, some people would be getting fired. From the designers who designed the stuff no one wanted to inventory managers and buyers who went crazy having millions of extra pieces created each season, heads would roll.
These days, inventory forecasting and buying have become so precise that there are typically very few pieces left in a mainline store, and it’s cheaper for the stores to clearance them out there, then to send them to another location.
Today, virtually 100% of the merchandise in outlet stores was created for the outlet store. It’s a different line, it’s a different brand, the tags are different, everything. You can’t return a regular gap purchase to the gap factory and vice versa because they operate as completely different entities. It’s like Gap and Old Navy.
The same parent company, totally different stores. That’s how you have to look at outlet stores today.
This is why you can find a full-size run of pieces in outlet stores, and why things come in multiple colors, and why you can buy basic black pants in an outlet store. Also, it’s why there are websites for factory stores now–because it’s not just a collection of one-off pieces. These are fully functional lines under the umbrella of the larger company, just with Outlet, or Factory Store in the name, and a slightly different tag. They have nothing in common with traditional factory outlets.
Similarly, stores like TJ Maxx have exploded so much that they had to come up with their own lines, or have other brands create lines that are just sold in TJ Maxx and other off-price stores, in order to have enough inventory to fill the stores. However, these stores still do get some overstocks from brands that don’t necessarily have their own stores to sell in.
I’d say stores like TJ Maxx, Nordstrom Rack, and the like are probably now 70% exclusives, and 30% actual overstocks. That’s not a verifiable number–just what I see when I’m in those stores, and obviously, it varies from store to store. Although I did notice in Nordstrom Rack a few months ago, they had like 2 racks that had signs above that said the contents were actually from Nordstrom, which, frankly is a good indication that everything else is not from Nordstrom.
So that’s where we are. Outlets and Off-Price stores filled with merchandise that has been created specifically for the outlets and off-price stores. They are no longer the bargain treasure hunts they used to be. They are a separate thing unto themselves.
But, this discussion is not “what is the history of outlet malls”, the question is, are outlets actually a good deal, so let’s talk about it.
Now that you know that the merchandise in the Outlet store did not, at any time, hang in the regular store, we can be a little more objective.
Long story short, there are deals to be had at outlet malls, just like with regular stores. They have sales, and clearance, and do store promotions.
The biggest issue I have with deals at outlet stores is that they compare their prices and merchandise to their mainline store counterparts, even though they have nothing in common.
For example, a pair of jeans at Banana Republic Factory might say on the tag $69.99, compare at 98.50, which is what a similar pair would retail for in a regular Banana Republic store This leads you to believe that you’re getting a great deal which it would be if you were buying the hundred dollar jeans for $70 bucks.
But you’re not buying the same jeans. You’re buying a similar-looking jean made from lesser quality materials and with lower quality construction. If you listened to my episode on building a high-quality wardrobe, you’d be able to spot the differences right away. Buttons are cheaper, materials aren’t quite as nice, seams aren’t finished the same way.
You are paying less for an item that is worthless. Keep that in mind.
So, are outlets a bad deal then? No, not necessarily. If you like the merchandise and you’re getting it at a price that feels like a deal to you, it’s a bargain. But don’t think because it’s at an outlet store that it’s inherently a good deal. It’s not. Not anymore.
The bottom line, there’s nothing wrong with outlet stores. They’re another option if you like a brand’s aesthetic, and want a lower price, but they’re not automatic deals, because those lower prices are reflected in lower-quality materials and construction.
Today’s outlets have nothing in common with the factory outlets of yesteryear, so when you’re evaluating outlet store items, don’t compare them to anything else, judge them on their own merits.
Thank you to the ladies who sparked this question, and If you’re listening, and have a question you’d like me to cover in Office Hours, email it to email@example.com.
Once again, I’d like to thank Holding Hangers for sponsoring this episode and don’t forget to visit holdinghangers.com and use code STYLE15 (all caps!) to take 15% off of your first purchase
That’s all for today–see you next week!