J. Crew will put its outlet-store clothing online in September

A recent story in the Wall Street Journal reports that J. Crew will be launching a website for their outlet merchandise in September. http://online.wsj.com/article/.....63812.html

The New York-based clothing retailer is gambling that it can expand sales without cannibalizing demand for more expensive merchandise at its mainline stores. Apparel companies typically locate outlet stores in out-of-the-way malls, forcing customers to drive long distances to get access to the discounted goods. J. Crew is among the first to risk selling outlet gear over the Internet.

The move comes as J. Crew reported an 88% jump in profit in its fiscal second quarter but lowered its outlook for the full year.

Company officials see this online addition as an opportunity to extend their reach.

Online and outlet sales have each seen consistently strong growth through the recession and bumpy recovery, bright spots in an otherwise lackluster retail environment.

J. Crew, like most specialty retailers, manufactures merchandise specifically for its factory channel. It's a different model than that of many apparel manufacturers and department stores, which use their off-price channel to liquidate excess merchandise.

Some retail analysts believe that the customer base for outlets, which at J. Crew offer merchandise 30% below the cost of clothing in the company's mainstream stores, is distinct enough that cannibalization is a low risk.

Apparel

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