High-end department stores are more and more becoming outlet companies, according to Bloomberg Businessweek:
At pricey apparel retailers such as Neiman Marcus and Bloomingdales, outlet stores may soon outnumber traditional locations, according to a new report by Bloomberg Industries. In fact, they already do at Saks [Fifth Avenue] and Nordstrom. Some 60 percent of Saks locations are now outlets, and all but two of the 15 stores it plans to open in the next two years will be discount centers. Nordstrom meanwhile, has 127 “Rack” outlets and plans to open another 17 by the end of the year.
The Businessweek piece further says that not only is the outlet field growing and prospering, but the outlet locations are often more profitable than the high-end stores.
That outlets are among the fastest-growing parts of retail is not new. But that high-end outlets are exploding strikes me as significant. It shows, once again, that customers from all strata want bargains and are ready to hunt for them.
I remember when people in this industry talked about “price shoppers” and “quality shoppers.” Those categories still exist, of course. But there may be a lot more overlap there than people realize.