Implication for the Retail Industry Essay
Overview of Article
Department stores that may want to develop or expand private labels to replace lagging national brands should be aware of the downfalls as well as the benefits.
Private labels increase margins from 6-10% higher than national brands. They also allow for fashion garments to be reproduced the following season if they are still in demand. However, department stores risk opposition from national brands if such private labels create too much competition.
If private labels are to be expanded, they should be of higher quality than the norm. They …show more content…
Private labels can be very helpful to a department store’s sales if quality and quantity are considered. The quality of private labels is important because if it seems too cheaply made, it will have to be marked down, which greatly lowers profits. Also, to get large profit benefit from a private label, it should be available in large volume, particularly across similar categories. For example, offering a particular private label in men, young men, and boy’s allows for minimal advertising to cover all three categories, increasing the label’s overall sales.
Private label clothing lines are typically