The Sacramento Bee (via the Raleigh News & Observer here) offers up a fascinating look at the outlet store business model. And to put it bluntly, outlet stores these days may be something different than what you think they are:
When you buy something at an outlet mall, do you know what you’re getting?
If you think it’s a top-quality, brand-name product at a deep discount, think again.
Ten years ago, that may have been true. But most brands now sell lesser-quality merchandise made just for their outlets.
Upscale fashion icons, including Coach and Juicy Couture, maintain a separate product line for their outlet stores, representatives for the brands said. Clothing retailer Gap Inc., which owns Banana Republic, also manufactures products exclusively for its outlets or “factory stores.”
“There’s no cross-pollination. Retail stuff never ends up here,” said Daryl Higgins, manager of the Gap Outlet store in Folsom, Calif.