Is It a “Faux Clearance” at Those Outlet Stores?

Hello, happy beginning of a new week, hopefully everyone was able to garner a little bit of rest and rejuvenation over the weekend.

We begin with a closer look at what is actually being sold at factory outlet stores, a timely topic in light of These Challenging Times. This story from Bloomberg points out the majority of what is being sold at the discount stores no longer comes directly from the retailers.  Some may recall that 30 years ago when such stores were becoming part of the retail landscape that almost all of the wares came right from the regular-priced version of the company.

As savvy shoppers are aware, this is no longer the case.

“Increasingly, merchandise is made specifically for the outlets and sold nowhere else at full price (even though it may be made by a top brand like Calvin Klein), says retail consultant Steven Dennis, who dubs the phenomenon “faux clearance.”

The story notes there is now a shortage of luxury goods available at many outlet stores, in part because retailers are manufacturing less, but also because of the abundance of online ‘flash sales’ sites like RueLaLa and Gilt Groupe.  The quality of the goods offered is also a topic of discussion:

“”You don’t have nearly the quality you had in the recent past and you don’t have the degree of discounts,” says Dennis, founder of Sageberry Consulting and a former Neiman Marcus senior vice-president. “It’s hard to believe all of these players can operate 50 to 100 outlets successfully. There’s going to be a shakeout.”

In some cases only 10-20% of the merchandise being sold at the off-price store actually comes from the full-price retailer:

“At Saks’ Off 5th stores, 10 percent to 20 percent of the merchandise is clearance from Saks’ full-priced stores, about 20 percent is Off 5th store-label goods, and most of the rest is made for the chain by vendors, says spokeswoman Julia Bentley.”

J. Crew recently opened its Online Factory store; the retailer makes it clear to shoppers that everything is “…designed exclusively for Factory at J.”.

The company is attempting a sense of urgency, a “buy now, time is running out!” mentality, with messages like this weekend’s:

“Pssst… this is a limited assortment, so hurry – you only have three days to shop”

Crew also reinforces the ‘limited time and merchandise’ message by keeping the site active only on weekends.  From the Journal’s story announcing the outlet plans:

“The New York-based clothing retailer is gambling that it can expand sales without cannibalizing demand for more expensive merchandise at its mainline stores. J. Crew is among the first to risk selling outlet gear over the Internet.

Anne Kadet at the Journal recently wrote about her expedition to a factory outlet mall in a piece titled “High Price for a Bargain,” here are her thoughts on J. Crew’s offerings:

“But it all felt a little confusing. When I asked a J. Crew clerk how to tell the factory lines from the discounted overstock, she cheerfully replied, “You don’t!” And to my eye, the construction on some merchandise didn’t look so hot. These stores might make sense for folks seeking the mall look for less. But if it’s not as well made, it’ll wear out faster, and that means another trip to the store. No thanks!”

The trend is confirmed by this column from Australia’s Inside Retailing:

“These stores serve not just to clear merchandise from their full price stores, but also to access a more thrifty but aspirational consumer with branded merchandise made specifically for the outlet itself.”

As noted in this post two weeks back, Neiman Marcus has opened a dedicated Last Call site.  And the company has opened a store near Dallas featuring only goods made specifically for its Last Call stores.  Neiman’s Last Call wares are described this way on a mall owner’s site:

“Last Call from Neiman Marcus offers a consolidation of marked down merchandise from the upscale retailer’s 32 stores nationwide, as well as Bergdorf Goodman. Last Call offers quality merchandise that shoppers expect from Neiman Marcus at significant savings. Prices at Last Call are typically 40%-80% off the original selling price.”

Back to Anne Kadet’s tale of her trip to an outlet mall:

“… I started with the more affordable retailers I’d typically shop in the city, like Gap, Coach and Ann Taylor. These mid-price shops, it turns out, mainly stock “factory” merchandise specially made for the outlet stores. Spokespeople for Coach and Ann Taylor later told me there’s no difference in quality, and that the factory lines include classic designs that originally sold at the retail stores.”

The company is wise to exploit the online channel, expenses are much lower when compared to a physical stores, the issue remains cannibalizing its existing stores, begging the question: will the off-price business move to a model more driven by online sales as opposed to brick and mortar stores?

If shopping at off-price venues do you care if the merchandise comes from a full-price store, or if it is something made only for sale at the outlet store?  Have you noticed a degradation in quality at off-price shops?


With last night’s finale of Mad Men we say goodbye to Don and Betty for another season. Sadly, there really wasn’t much of Betty this year, and when we did see the former Mrs. Draper, she was less of a stunning, stylish mid-century mom and more of a neurotic shrew, certainly not anyone you would want on your Junior League committee, to be sure.

Betty was ‘replaced’ by a number of women, below we see Don with Megan.

A number of friends have asked if we enjoyed the finale.  Yes, we liked the show, but we were also a wee bit disappointed, hoping for more of the dramatic tension we saw in last year’s final episode.  Below we see Don making The Call, he really is the poster boy for “What is a Cad?”.

Meredith Blake’s piece on Show Tracker is outstanding, this may well be our favorite portion:

“It’s a scenario that I think will be familiar to many women: You do the hard work of making someone into a good boyfriend, then your new-and-improved boyfriend moves on to someone else. It’s like you found this great fixer-upper, you gutted the whole place, pulled out all the ugly vinyl siding to reveal the original moldings underneath. Then all of a sudden someone else is moving her furniture into your exquisitely remodeled home. So not fair!”

The Journal’s Speakeasy blog offers this:

“It will obviously have a profound effect on future seasons of the show. But in the eyes of this longtime fan, that’s not exactly a good thing. The engagement is an enormous misfire—a baffling plot twist that’s surprising but not at all logical.”

The episode does have us thinking we may have misread CreepyGlen, perhaps his name should be JustPlainGlen; his goodbye to LittleSallyDraper was actually rather sweet.  As was the wistful tone in Betty’s voice in one of the final scenes.


Jordin Althaus/AMC-TV


In reality, that wistful tone may be emanating here in the corner condo at Princess InterGalactic HQ, we liked those characters together, more of a DonandBetty. But that is forever gone, and it is time to move on. Sniff.

With that we say g’bye until next time!


Filed under preppy

11 responses to “Is It a “Faux Clearance” at Those Outlet Stores?

  1. I have managed to avoid JCrew’s clearance sales. Not sure how. Maybe I do have willpower.;-) Thanks for reminding me that I forgot to watch Madmen last night. Thank goodness I DVRed it. Must go watch it.
    Happy Monday to you, Lovely Princess!

  2. Really terrific post on the outlets. Some of the “outlets” are just plain disappointing in NY and have been for the past several years. But oh, when you do find a treasure – the joy!

    Re Mad Men – love, love, love the show, but was a tad disappointed about the final episode of the season. I liked Dr. what is her name? I have this bad feeling about that breakup; he did confide in her… And Betty was just awful this season. I found myself very grateful that motherhood has evolved from the 1960s!


  3. Thank you for your very informative article. I have been suspicious of these outlet stores for years.
    Also, pay attention to the pricing on flash sales. Often prices are raised, just so that they can be lowered for the flash sale.
    Have a great week.

  4. I personally believe some J Crew outlets have higher prices than sales in the stores. I try to avoid shopping at them unless they are liquidating.

  5. Really great post with tons of information. It’s such a transitional moment with online sales growing and real world, even outlets, not showing vigor. I have accidentally become obsessed with the flash sale sites, thinking that is brilliant and only only only selling authentic merchandise. There are others in this suddenly lucrative field that are not working with the designers with customers, curiously, running to their defense with a “probably bought from shops.” It’s as likely that some are buying replica and mirror copies aka fakes.

    Strange moment and I hope that there’s some honesty forthcoming. It’s finally rooking innocent customers who shop carefully but without any protection.

  6. Lisa M

    I find that the most interesting thing about the outlet store success was that Ralph Lauren was one of the first (if not the first) to see its potential.
    The House of Lauren was built on his iconic Polo shirt but the foundation was further built up with profits from his ‘outlet’ stores. Make no mistake, a good deal of the stuff sold there is made to be sold there – there is the occasional ‘last season’ item for sale. I am currently reading a bio on him that tells all.

  7. Little Red

    I don’t shop much at outlets anymore. And if I were to buy anything, it would be the retail store merchandise.

  8. Clare

    OMGAHHHH I loved the Mad Men episode last night. It took me a night’s sleep a full days work to realize how much I loved t, but I def. did. I loved Meghan and I think this is a perfect set up for next season in sooo many ways!

  9. OH MY GOSH!! I was stunned speechless last night after watching the finale. Please let me share my emotions with you:
    sorry for Betty – yes – when she said “things are perfect” = she loves Don. Is it really, totally, completely over between them? Don is as giddy as a teenager. Betty’s world is farther from perfect than ever before. She’s mean, but sad.

    Utter shock at Don’s proposal to Megan. Still reeling in surprise :-)

    Wasn’t that scene in Cali at Anna’s house sad?

    Glenn – that’s Matthew Weiner’s son IRL – I agree with you. Turned out to be harmless really. And how spot on is he with Betty Draper.

    Joan – with child – there is definitely more to that story. When Roger realizes she kept this baby, he may have the big cardiac arrest!!

    Way to go Peggy and Ken – And how much I loved Peggy and Joan’s moment at the end of the show.

    OH my. What is to come??? What is to come??? And, we wait . . .

  10. Yes, I have been complaining about outlets for years, & I haven’t been the least bit tempted by my “J. Crew outlet” emails. I can remember what seem like many years ago when the Gap outlet began selling its “own” merchandise instead of merchandise from the “real” Gap. For a few years, the “outlet” merchandise was okay, but then it became clear that the quality had downgraded, & the price had gone up. =( I still enjoy a few of the outlets…White House / Black Market legitimately gets outlet merchandise from retail stores, or they did last time I checked.

    Oh, & another reminder that I am overdue to buy all available seasons of Mad Men & have a marathon weekend of finding out what it is I’m missing that every chic person I know is loving! =)

    Have a fab week!

  11. I love that you reviewed the Mad Men finale! Nice to see someone talking about it. I completely agree… I think they’ve gotten themselves a reputation like a lot of other shows and especially with last season to have a big season finale. This one wasn’t that big. Though getting engaged was still quite a shocker.

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