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Bloomingdale's appears to be moving forward with an outlet store concept in 2010. They currently have plans for four outlet stores that will be approx. 25,000 square feet. They will be placed in shopping centers that have an upscale outlet store focus. Macy's, the parent company of Bloomingdale's plans to roll out additional Bloomingdale's Outlet store locations in 2011. Bloomingdale’s Outlet stores will offer a range of apparel and accessories, including women’s ready-to-wear, men’s, children’s, women’s shoes, fashion accessories, jewelry, handbags and intimate apparel.

I do not fully agree with the concept of Bloomingdales opening outlet stores. I sort of understand the thought process, but do not necessarily agree with it. The thought process I assume is based on the fact that the Bloomindale's main stores are sitting on inventory for too long a period of time and need a method to close out the merchandise. Clearly, an outlet store opens the door to move inventory into an environment that allows product to become discounted for quicker sale. In theory, they can maintain their high end image if they do not put sales racks on the floor showing deeply discounted prices along side racks of clothing with current merchandise at high prices...

The part of the outlet store concept that concerns me would be it's potential negative effect on the "Bloomingdale's" brand. When a fine retailer opens an outlet store, does opening the outlet store show "weakness"? Yes, I understand that many high end (luxury) retailers and fashion brands have outlet stores. However, the fact that they already exist, does not mean that the outlet concept does not cheapen the brand in some way. In my opinion, the words "Bloomindale's Outlet" simply say's, "we can not sell all of our product in our regular stores".

Michael Gould, Bloomingdale’s chairman and chief executive officer said , “Bloomingdale’s Outlet stores are an opportunity to expand our presence in new and existing markets, as well as to remove clearance from full-line Bloomingdale’s stores in a timely manner.” When I read this statement I only see, "remove clearance from full-line Bloomingdale's stores". The point about expanding new markets (lower price point markets), does not make sense to me. Shouldn't Macy's stores fill a void at price points below Bloomingdales. Anyway, in my opinion the move is to clear inventory.

If Bloomies has enough clearance inventory to fill new outlet stores, possibly something is wrong with the merchandise assortment that they are purchasing. Or possibly, it is a reflection on a slow down in luxury purchases. Either way, it shows a possible weakness in the store (or in the luxury market in general). The good news is that Bloomindales appears to see an issue and is taking proactive steps to adapt to the market. The creation of an outlet store concept, is certainly one potential way to address the inventory.

My guess is that Bloomingdales does not want to take on the image of being a value retailer.

Learn more about Bloomingdales Outlet Stores.

By the way, as always, I can be completely off the mark on this issue. Maybe their is an entirely different reason for Bloomies to open an outlet market. Maybe it is not a sign of weakness as I indicate above. Possibly, it is a sign of strength and growth. Anyway, I leave that for you to decide. Actually, that is why you will see a "comment" section below. You are welcome to list YOUR thoughts on the Bloomingdales Outlet Stores in the comment section of this blog post.

If you enjoy shopping at outlet stores, you can find some at the outlet clothing store section on Apparel Search. If you do not know what an outlet store is, you are welcome to read the outlet store definition.

Learn more about Bloomingdales.
Learn more about Macy's.

Again, you are welcome to list YOUR thoughts on the Bloomingdales Outlet Stores in the comments section below.

Is this a smart move by Macy's or a bad move?

Views: 224

Comment by Maryanne on January 22, 2010 at 9:02am
that move just changed bloomingdale's image.
a smarter move would have been a bloomingdale's 'annex' where excess inventory could have been placed.


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