Amazon’s seemingly unstoppable rise to retail dominance continues with news that it now offers a wider selection of Calvin Klein and Tommy Hilfiger apparel than even Macy’s or JCPenney.
These brands, both owned by PVH Corp, are the latest in a growing line that have traditionally relied on a big department store presence, but are now shifting their focus online.
And it’s indicative of where the fashion market is heading, according to Business Insider, which highlighted the findings of a report from Nomura.
So much so, that analysts at Morgan Stanley forecast Amazon will become the number one clothing retailer in the US in 2018, overtaking Walmart, CNBC reported. Amazon’s 100 million Prime members and millennial shoppers are seen as driving its clothing sales, which are strongest in the area of casual, everyday clothing.
The authors of the Nomura report wrote that “Department store-heavy dependent brands could potentially see a growing Amazon apparel push as a plug to longer-term department stores’ woes.”
They noted that recent improved sales figures for these stores should be viewed only as cyclical and not structural.
“Although Amazon’s apparel push poses a threat to the traditional apparel store model, assuming it does thrive, we wonder if it may actually help brands,” they added.
Amazon is generally known for more basic clothing items, but increased sales recently of brands such as Nike and J.Crew mark a new phase for the e-commerce giant. It has also seen growth of its private-label brands, and Prime Wardrobe – a try-before-you-buy service.
One reason some brands are migrating online to protect the negative effects on their image of the deep discounting that takes place in some stores.
Michael Kors CEO John D. Idol noted this effect back in 2016, when he highlighted how “that channel has become very promotional and, in fact, is causing us difficulties in our own retail channel, which is why you see our gross margins declining because we’re really trying to meet certain pricing that’s happening to be competitive.
“And we don't think that’s the right thing to do for our brand going forward.”
Coach and Ralph Lauren are taking the same approach: Coach is closing 250 of its 1,000 wholesale stores, plus undertaking a “reduction in markdown allowances” to protect the brand’s status.
These brands, both owned by PVH Corp, are the latest in a growing line that have traditionally relied on a big department store presence, but are now shifting their focus online.
And it’s indicative of where the fashion market is heading, according to Business Insider, which highlighted the findings of a report from Nomura.
So much so, that analysts at Morgan Stanley forecast Amazon will become the number one clothing retailer in the US in 2018, overtaking Walmart, CNBC reported. Amazon’s 100 million Prime members and millennial shoppers are seen as driving its clothing sales, which are strongest in the area of casual, everyday clothing.
The authors of the Nomura report wrote that “Department store-heavy dependent brands could potentially see a growing Amazon apparel push as a plug to longer-term department stores’ woes.”
They noted that recent improved sales figures for these stores should be viewed only as cyclical and not structural.
“Although Amazon’s apparel push poses a threat to the traditional apparel store model, assuming it does thrive, we wonder if it may actually help brands,” they added.
Amazon is generally known for more basic clothing items, but increased sales recently of brands such as Nike and J.Crew mark a new phase for the e-commerce giant. It has also seen growth of its private-label brands, and Prime Wardrobe – a try-before-you-buy service.
One reason some brands are migrating online to protect the negative effects on their image of the deep discounting that takes place in some stores.
Michael Kors CEO John D. Idol noted this effect back in 2016, when he highlighted how “that channel has become very promotional and, in fact, is causing us difficulties in our own retail channel, which is why you see our gross margins declining because we’re really trying to meet certain pricing that’s happening to be competitive.
“And we don't think that’s the right thing to do for our brand going forward.”
Coach and Ralph Lauren are taking the same approach: Coach is closing 250 of its 1,000 wholesale stores, plus undertaking a “reduction in markdown allowances” to protect the brand’s status.
Sourced from Business Insider, CNBC; additional content by WARC staff
