The Dirty Secret Behind Outlet Stores and Discount Designer Fashion

*Spoiler Alert* Your designer dress isn't discounted it's just cheap

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If you love a fashion bargain, you’ll know your local outlet racks like the back of your hand. On the surface, outlet stores sound like a dream; luxury designer goods for an affordable price. Sure, they might be out of season and you have to pillage your way through the disorganisation that usually accompanies outlet stores but if you’re happy to spend a bit more time shopping and tend to pick evergreen, timeless pieces, it’s all good right? Wrong!

We’re so sorry to burst your bubble but the awful secret behind outlet and discount stores is out of the bag – that designer dress isn’t discounted because it never was full price, it’s just cheap, which means, cheaply made.

The Supply Chain Myth

Most people who visit outlet stores presume the process goes like this: the designer or brand on the label used to sell the garment in their boutique or store proper, it didn’t sell out even after a discount price in store and so it was given over to an outlet store at an even more discounted price. We’d love to tell you this is how it works, this is what they want you to think happens but unfortunately, the truth is rather more deceiving.

More often than not, the clothing from outlet stores never enters the brand’s boutique or “regular” store at all. In fact, it’s often even made in a completely different (read cheaper) factory than the brand’s standard collection is made in and can even be designed completely independently from the collection of the season.

Is your mind blown yet?

Why The Deception?

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Once upon a time, outlet stores did work the way most people presume they do. But as times have changed, the way we shop has changed, our expectations have changed and so has the way designers use outlet stores. It’s no secret that fast fashion giants like H&M, Pretty Little Thing and in particular Zara have such immense supply chains that they are able to produce a new collection and have it in stores within two weeks. Higher end brands, simply cannot compete with that timeframe, their pieces are more complicated to make and they’re made with more care and attention, resulting in better quality pieces. They also can’t compete with the price these fast fashion retailers are offering their products for, it’s simple, a garment that is higher quality, will cost more to the consumer. But what they can compete with are their prices in outlet stores. In order to make themselves appealing to a wider range of people, they need their outlet products to be in a similar price range to fast fashion.

Do you ever rummage through the racks at T.J Maxx or Nordstrom Outlet and just see boring dress after boring dress? Yes, it may have a designer label on it but overall the design of the garment looks like it could have come out of seriously low end bargain basement? Know you know why! The designs don’t necessarily correlate with the exciting techniques and ideas the brand uses in their collection proper, they’re being designed to be generic and cheap to produce in order to give them that low cost price tag.

Brand Déjà vu?

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And it only gets worse. Ever noticed that there’s often a surplus of the same designer’s goods? In T.J Maxx and their British Counterpart T.K Maxx, you can’t move for Calvin Klein branded goods. The reason for this that outlet brands often create an agreement with certain designers that allows them, the outlet store, to produce garments in their own price controlled factories while the brand receives a percentage. The outlet store often takes over sourcing, production, shipping and even in the worst of cases, design! This means that they can design and produce a product, slap a Calvin Klein label on it, sell it low cost and you walk away thinking you’ve just got an amazing deal on a Calvin Klein dress. In truth, how can it be Calvin Klein when it wasn’t designed by Calvin Klein staff, it wasn’t produced in a Calvin Klein factory, it wasn’t bought at Calvin Klein and you didn’t pay a Calvin Klein price for it? To put this into context, according to Calvin Klein in 2012, over 50% of their global retail sales was as a result of these agreements with outlet stores, representing $3.8 billion of Calvin Klein sales.

Should We Stop Shopping At Outlet Stores?

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We love a fashion bargain just as much as the next person and you don’t have to stop shopping at outlet stores. Sometimes if the garment is exactly what you need or want and the price is right, it doesn’t matter what the label says, you want it regardless and that’s perfect. The problem is the deception and shoppers need to be aware that even though a pair of CK pants have a tag that says they are now $30 marked down from $99, the were never $99 which in turn means they were not created with the quality of fabric and sewing of an actual $99 pair of pants.

So, by all means, continue to pillage those stands for bargains but do be aware that the quality is often not the same as that found in the label’s store and this could actually change your mind as to whether that “designer” garment is actually bargain.

Article Commissioned by Mod'Art University of Shanghai

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