Though there's been much more exposure on outlet malls and factory outlets over the past few years, retailers have still remained successful in convincing the vast majority of the public that products at outlets and factory stores are premium quality and exceptional deals when usually the opposite is true. However, if you look carefully and know what to look for, you can find some real values.
Here are some specifics to take note of.
The Factory Store Charade
Factory stores generally contain the lowest true discounts that one can come across - by that I mean a product that was originally meant to be priced at a certain point and subsequently discounted after it didn't sell well. Almost everything at any factory store is made for the factory store. You will occasionally hear stories about RL Black Label found at a Ralph Lauren Factory store or a Golden Fleece suit found at a Brooks Brothers Factory - don't expect to find anything like that yourself unless you go very frequently and get very lucky. The basic tenet of factory stores is that they make lower quality clothes and hope you will think they are the same - basically preying upon the ignorance of the masses, and it works. Look closely at the labels and you'll see they don't match mainline labels. BR uses three stars to denote factory lines, Brooks Brothers 346, etc. Those are all lower lines with lower build quality and cheaper materials.
If I'm at an outlet mall I'll go inside a factory store because I'm standing there and ever-optimistic at my core, but rarely do I find anything of acceptable value (your mileage may vary). If you find yourself in one, there may be a rack of a couple mainline items in a corner somewhere if you're lucky (depending on the brand). That's the only way that you will find something at an actual deep discount. Everything else is a trick to make you think you got 50% off your whole purchase or something. In reality they always planned for you to pay that - it's the actual retail price, in effect.
I realize that this is a controversial stance to some, as J. Crew Factory and some other factory stores have cult followings, and that's fine. If you're on a strict budget you could do a lot worse and I don't think the clothes are necessarily total garbage - you just have to be comfortable with your valuation based on the product quality delivered at the price you are paying. The underlying fundamental problem is that the brands market to the perception that factory stores are the same or offer a better value somehow because of the "craaaaazy discounts." Poppycock. Balderdash.
Things to Look For
- The rare mainstream items usually found in the clearance rack.
Things to Be Cautious Of
- Getting tricked into false valuations of MSRP or "compare at" prices.
Department Store Outlets - A Better Bet
Department store outlets are generally much better than factory stores. However, they still need to fill their stores with merchandise, and this can't be done solely with out-of-season and true clearance merchandise. Saks Off 5th, for example, fills its stores with store label Saks Black, Red, Blue, Gray, etc., which are a total waste of time yet make up a large percentage of store merchandise. There are a multitude of items at department store outlets that never saw the inside of a Nordstrom or Neiman Marcus. They are just hoping you will fall under the outlet spell and assume they are a good deal because they are there and someone drew a line through an MSRP. This is where it becomes harder to separate the meh from the amehhhhzzzing. Heh.
- Pricing and discount patterns - Different stores have different ways of discounting. Nordstrom Rack has its regular items and a clearance section, but periodically will do extra 25% off "Clear the Rack" events for clearance items. Century 21 will start an escalating clearance starting at 25 to 33% off, with eventual sales hitting 75% additional off or more. Neiman Marcus Last Call and Saks Off 5th run perpetual "Extra ____% off" sales of varying quality.
- Big ticket items not usually found discounted - See the article I wrote on the Burberry Prorsum trench coat I picked up a while ago. If you're willing to invest and get acquainted with what to look for (higher brand lines vs. diffusion, construction details, etc), I've seen mainline Ermenegildo Zegna, Giorgio Armani, Tom Ford, and other high level brands trickle into some department store outlets at ~75% discounts, if not more.
- Clearance items - This is where patience really pays off, as occasionally you can hit the jackpot. For instance, I found a pair of Giorgio Armani (Armani's flagship line) charcoal wool trousers in the clearance section at Nordstrom Rack for $80 (about 1/10th actual market price). That kind of thing doesn't happen often, but when it does it's like winning the mini lottery. I've also picked up some other nice things like Rag and Bone jeans for $40, those Neuw jeans I found I've come to love, Made and Crafted Selvedge slim jeans for $40, etc.
- Sunglasses - Some of the best values you can find at department store outlets. Most outlet stores price their sunglasses in-store between $79 and low $100's for items you would normally be able to find only at $150-300's. I bought a pair of folding Persol 714's for about $100, found another pair with polarized transition lenses for $79, and generally purchased all my sunglasses around that price - not in weird colors or strange sizes and often polarized at the same price. This does not apply to online storefronts, as they are usually much better cost-controlled (sorry).
- Outlet house brand items - It's not what you're there for. It's what they want you to buy but you're smarter than that. *Special note for Saks Off 5th suits - Not necessarily "don't buy," but be aware that Saks will make its own suits for the outlet with fabric from Zegna and other notable houses that are not Zegna suits. A lot of people mistake this after looking at the sleeve tag.
- Diffusion lines - Armani Exchange is not Armani Jeans is not Emporio Armani is not Armani Collezioni is not Giorgio Armani. In fact, they are vastly different in design, construction quality, and materials. If you want to buy something just so you can have one of those Armani eagles stamped on your shirt, that's fine, get Armani whatever. Actually no, it's not fine. It's stupid. Try to get acquainted with the design house lines if you're interested in their clothing. If not, just look it up on your phone for a minute if you find something. Wikipedia will usually include a list of lines made under a brand with a simple description of the aesthetic and design philosophy, for example.
- Brands you've never heard of and/or can't find anything about - If you can't judge it for yourself, can't find information on it readily, and can't tell if it's a good deal, it may be best to skip it. If you're happy with the fit, happy with the price, and willing to take a chance by all means go for it, but don't ever trust a store based on their word. Don't trust sales people. They usually don't know anything about anything, but if you make the mistake of asking them they will tell you that Robert Graham shirt makes you look fantastic and that you should buy it. It doesn't and you shouldn't.
As I briefly touched on earlier, online outlets under the same name as their brick and mortars don't carry the exact same inventory online as they do in physical locations - and often not for the same prices (usually higher online). This makes it a bit harder obviously for people who can't get to a physical outlet store easily. It is worth it, though, to check out the online outlet stores to get acquainted with what is available, as you can sometimes find good value there as well (possibly a conversation for another day).
The idea behind value hunting, be it vintage, online, outlet, or just sticking to mainstream retailers is that you have to be willing to play the game enough to give yourself the chance to win big once in a while. Walking into an outlet once a year you may get lucky, but your chances increase with higher frequency. I might go more than 10 times without finding a single thing I think is worth my money, and I'm ok with that because the 11th time I may find something great. It's basically a numbers game combined with a test of your ability to identify the proverbial diamond in the rough. All it takes is just a few minutes of your time and an active interest in maximizing value for your money.
Any thoughts, comments, or questions feel free to send me a line.