James Mammarella

Did someone say off-price?
August 10, 2007

There are indications that consumers just can’t seem to get enough brand-name goodness at wholesome value-pricing.

Indications from suppliers. The taste leaders at Donna Karan and Calvin Klein sounded like a chorus line at market:

“Fresh, young and modern,” said Donna’s people – and with prices 20% lower.

"We're trying to attract the younger customer,” said Calvin’s folk – “a level down with product that's affordable."

Indications from retailers. In the latest monthly same store sales, with the outstanding example of JCPenney, there were no other department stores among the real winners in July. Instead, the major gainers were warehouse clubs Costco and Sam’s, off-price juggernaut TJX, cheap-chic Target, and rural discount retailer Duckwall-ALCO.

Negative comps were registered – just as in June – by Macy’s, Gottschalks, and The Bon-Ton Stores, joined for this round by Dillard’s.

And my favorite, coy-but-revealing sales announcement came straight from the bargain bin, as closeout major Big Lots said that its robust second-quarter 5.2% comp store gains were “positively impacted by a large closeout deal from a major home furnishings retailer, which the company estimates increased comparable store sales by approximately 2%.”

Big Lots even said its Northeast and Southern stores benefited the most from the deal – giving us a clue to the identity of the merchandise-mulching source.

It’s looking more and more like an off-price home textiles marketplace. Considering how weak the dollar is supposed to be, isn’t it amazing how much brand value a buck can still buy?

Posted by James Mammarella on August 10, 2007 | Comments (3)