Private labels change retail landscape

Bloomberg posted an article about the retail apocalypse that is being fueled by no-name brands.

Another factor affecting this is the fast-changing fashion trends. This may be a reason that off price chains such as TJMAXX, Burlington, Ross have all seen growth when malls are going away. People aren’t not into brand names, people still love brand names for the quality behind the brands but people are smarter and realizing that full price retail is marked up beyond reason. Stores like TJMAXX or Nordstrom Rack┬áhave same brands as the malls, just with a price┬áconsumers are more comfortable paying, especially since fashion now a days is not seasonal. It is literally new trends every week, month, etc., and the pressure to have new, trendy clothes is real. People would not mind spending a premium if they knew that the garment would be trendy for an extended period of time, but they are not going to spend $200 on a shirt or something else if they know there will be something new and half the price probably the week after in a off price store.

Whether it’s a $45 shirt or a $10 shirt, they’re both made of cotton and probably both made in Bangladesh by the same subcontracted seamstresses. With the $45 shirt, there is just more profit to pay for the advertising of the name brand and there might be more quality control processes. The more expensive shirt will (hopefully, but not always) be made of a thicker, better quality fabric. It is a combination of name brands cutting costs and greater consumer awareness that the $45 shirt, aside from the label and logo is not always better than the $10 shirt.

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