Off-price retailers

Off-price retailers specialize in selling national brands, designer collections, or promotional goods at discount prices.

Off-price retailers are those that buy merchandise at low prices, carry well-established (including designer) brands, and sell merchandise assortments that change quickly and have inconsistent sizes and styles (referred to as broken assortments).

The following subsections describe these types of off-price retailers:

• factory outlet retailers
• independent off-price retailers
• retailer-owned off-price retailers
• closeout retailers
• sample stores.

Factory outlet retailers

Factory outlet retailers or simply outlet stores sell the seconds, irregulars, samples, or overruns (merchandise produced in excess of their orders) of a fashion brand company, as well as merchandise produced specifically for the outlet retail stores. In some cases, fashion brand companies use their outlet stores as test markets for styles, colors, or sizes of merchandise.

Once located primarily near production or distribution centers, outlet stores now commonly comprise entire shopping centers. They are typically located at a distance from full-price retailers that carry their merchandise (based on agreements with local full-price retailers).

Shopping centers composed of outlet stores have become popular destination shopping areas.

Independent off-price retailers

Ross Dress for Less® is an off-price retailer with 1,480 locations in the United States.

Retailer-owned off-price retailers

Some retailers operate their own off-price stores (e.g., Off 5th, Nordstrom Rack). In these off-price stores, retailers sell merchandise from their regular stores that did not sell within a specified time period, private label merchandise, or special orders purchased specifically for the off-price store.

Closeout retailer

Closeout retailers specialize in buying a variety of merchandise through retail liquidations, bankruptcies, and closeouts. Then they sell this merchandise at bargain prices. An example of a closeout retailer is Tuesday Morning, which includes over 700 stores “specializing in both domestic and international closeouts of medium to high-end name brand gifts, luxury home textiles, home furnishings, housewares, and seasonal décor” (Tuesday Morning 2018).

Sample retail stores

Sample retail stores specialize in selling fashion brand companies’ sample merchandise at the end of the market selling period. These stores may be pop-up stores during market weeks or are located near major marts, such as the California Market Center in downtown Los Angeles.

In the next step, you will learn more about rental services and resale retailers, which specialize in the sale or rental of used or previously worn merchandise.