Department Stores Expand Outlet Divisions

Bloomingdales-Outlet-Sawgrass-Mills

Department stores are deciding more and more frequently to invest in their own off-price outlet stores in order to retain those customers who flock to retailers such as Marshall's, Ross Dress For Less and Burlington when they are looking for discounted designer brands. While some department store chains such as Nordstrom have been capitalizing on this trend for a number of years, others such as Macys and Lord & Taylor are in the infancy stages of developing their outlet store divisions.

Of the major "better" department store chains, Nordstrom has the most developed outlet division. Since opening its first Nordstrom Rack store over 40 years (1973) in Seattle, the retailer has added more than 100 Rack locations. The Nordstrom Rack stores sell a combination of clearance merchandise transferred from the mainline stores, closeout merchandise purchased directly from suppliers (including brands not carried in mainline stores) and "makeup" products produced specifically for Nordstrom Rack using either the supplier's brand name or the Nordstrom name. As of December 2015, the Nordstrom Rack outlet division had 194 stores as well as its own webshop NordstromRack.com.

Another department store chain which has been focused on growing its outlet division for over two decades is Saks Fifth Avenue. Its first outlet store was opened in 1992 under the name 'Clearinghouse' but was changed in 1995 to Saks Off 5th. During the past 20 years, the Saks outlet store division has grown to 90 store locations and it too has its own e-commerce website, SaksOff5th.com, which ships within the United States as well as internationally. It carries prior season and markdown merchandise from main line stores, designer closeouts direct from suppliers and special makeup items under the Saks Fifth Avenue brand. Merchandise categories include womens clothing and dresseswomens shoes and bags, womens jewelry and accessories, mens clothing, mens shoes, mens accessories, mens watches, childrens clothing and home decor.

Other department store chains which are just starting to develop their outlet store divisions include Macys, Bloomingdales and Lord & Taylor.

Macys outlet store division is called Macys Backstage with the first stores opening in Fall 2015. At present, there are 6 Macys Backstage stores concentrated in New York City (Brooklyn, Queens and the Bronx) and surroundings (Melville and New Hyde Park on Long Island and Orange in New Jersey). Macys Backstage stores offers merchandise from 20-80% off original or suggested retail. Categories include womens, mens and childrens clothing, shoes and accessories as well as an expanded assortment of furnishings, home decor and bed and bath. Currently Macys Backstage does have a website but not a webshop yet, meaning you can only purchase Macys Backstage merchandise in one of the stores. Shoppers can continue to find Macys clearance merchandise on the main macys.com website.

Bloomingdales outlet division is called simply enough…Bloomingdales Outlet. As of December 2015, there are 15 Bloomingdales Outlet stores in such locations as the Saw Grass Mills Outlet Mall in Florida, The Shops at Park Lane in Dallas, Texas and The Gallery at Westbury Plaza Outlet in Garden City, Long Island, New York. Bloomingdales Outlet does not have a separate website but instead has its own section on the bloomingdales.com website. 

Lord & Taylor, like Macys, is just starting to develop its outlet store division. It just recently opened its very first outlet store called Find @ L&T, which is located in Paramus, New Jersey. The store operates under the Hudson Bay Outlet divison, rather than directly under Lord & Taylor. Find @ L&T does have its own website (findatlt.com) but again not a webshop. For now, L&T's designer sale and clearance merchandise is sold via the lordandtaylor.comwebsite. 

 

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