Outlets Keep Luxury Stores Afloat

No frills, but great prices, greet customers at outlets, which are a growth sector
By Harry Kimball,  Newser Staff
Posted Sep 24, 2008 5:25 PM CDT
A Nordstrom store in Denver.   (AP Photo)
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(Newser) – In a stagnant economy, luxury retailers are opening off-price outlet stores at a faster clip, drawing in customers with sale prices they’d never see at a flagship, BusinessWeek reports. Including such names as Saks, Nordstrom and Coach, a trend is emerging: While visits and sales at boutique stores are down, outlet or factory locations are busier, and customers are spending more per visit.

“Only stores that scream value are getting consumers in,” one analyst said. The outlet market is so energetic that Saks, at its Off Fifth stores, is offering deep discounts on merchandise still on display at its main locations. And Nordstrom, which recorded a second-quarter loss of 6%, saw sales at its outlets up more than 6%. Outlets are much cheaper to run than swanky boutiques, assuring a good deal on both sides of the transaction.