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post #16 of 20
Yes, it's true. Especially for Polo shirts, how can you go wrong? They are mostly just standard, solid color. It's a great store.
Do they carry custom-fit polo's though? Jon.
post #17 of 20
If anyone gets a chance, go to the Polo outlet in Secaucus, NJ. Everything is $9.99. Shirts, sweaters, pants: $9.99. At least that was true the two times I've been.
Any selection of purple label stuff? (I'm in NJ, but it's around an hour's drive to the outlet, so I'd need a huge motivating factor to get me interested).
post #18 of 20
Many good points have already been written about the financial structure of the retail business as it applies to the complicated case of Polo. Because of the way the original question was phrased - What is a good price for a particular suit? - I think we may have been a little guilty of applying general truths to a specific case. In general, most successful regular price retailers have an overall gross margin in the low forty-percent range. (Gross margin is what is left of total sales for a year after you deduct the cost of the goods sold.) That takes into account all the high mark-up items (knit shirts, in the Polo case) and all the mark-downs. Likewise, the costs of running the business tend to be in the mid-thirty percent of sales range. So, if a retailer grosses 42% of sales and running the business costs him 35% of sales, his gross or operating profit (before taxes) is 7% of sales. That's a quite successful retailer. As an example of how retail strategies vary, however, look at Wal-Mart. Wal-Mart's gross margin is only about 24% of sales, but its costs are a preposterously low 17% of sales. When you hear on the news about how Wal-Mart has revolutionized retailing with the efficiency of its systems, there's the proof. Wal-Mart clears the same percentage of sales as Neiman-Marcus. To understand Polo's situation, think of the regular price retail stores as being unrelated to the wholesale division, as if they were separate companies trying to make a profit in their own segment of the apparel industry. Polo owns no manufacturing capacity; everything sold with a Polo label in it is made by some other company, a nameless contractor or a name-brand manufacturer, like Corneliani. Polo's contribution is "design and marketing." Polo buys its merchandise from a variety of makers, imports, inspects, tags, inventories, packages, and ships it to Polo retail accounts, including the Polo retail stores. So, Polo wholesale has it's costs of doing business. The costs of servicing its own retail stores is indistinguishable from the cost of servicing a run-of-the-mill specialty store. (Big department stores are a different story because of markdown money, returns, in-store shops, sales specialists, and a host of other expenses Polo incurs.) The Polo regular price retail stores are competing on a fairly level field with other regular price retailers. They buy the goods from Polo wholesale, mark up the prices, and try to sell them profitably. There is a notorious story dating to the "Chariots of Fire" days in the early eighties. The story goes that Polo took a sample of its Scottish Fair Isle vest to China (an audacious tactic, at that time) and had it copied by hand for a few dollars a copy. Polo sold the sweater at the same price as the Scottish original, around $100, making a 90%-plus mark-up at wholesale. Then, again, they sold some of the Scottish ones, too, at a 30 or 40% mark-up. If you were shopping on Polo.com, what would be a good price for that Fair Isle sweater? It's hard to say. Is there any difference in getting a Scottish-made sweater or a Chinese-made sweater? In retail bookkeeping terms, there is no difference because the total cost of all the sweaters is offset against the total retail realized from selling them.
post #19 of 20
No, no purple label in Secaucus, no custom fit stuff either. Just standard Polo stuff. Obviously, try calling to check on pricing if you are thinking of making a reasonably long trip.
post #20 of 20
Sorry to bail in the middle of an explanation. The point of the Fair Isle illustration is that it is difficult to base the judgment of good buy vs bad buy on the wholesale cost of the item at hand. Further, it's also difficult from the viewpoint of the retail customer to calculate the production cost from the wholesale cost. The retail prices of different items in the same store may not be related consistently to their wholesale cost. Some will be priced at a higher margin, some at a lower margin. To eliminate the complicating factor of relative price from the customer's mind, many men's stores create price lines for neckties. On the basis of averaging the costs of large segments of the inventory, the retailer decides to price ties, for instance, at $60, $80, and $100 even though some of the $60 ties cost him $22.50 and others cost $34.50. Knowing that overall the merchant has a 52.5% markup on ties doesn't tell you how much any individual tie costs at wholesale. The calculation is further complicated when you consider that the retailer may buy some of his inventory off-price. Manufacturers have to run sales, too, to close out their end-of-season inventory. Who gets the benefit of the makers' markdowns? The retail merchant may have two identical items on his shelf at the same price. Yet, one may have cost him twice as much as the other because one was bought at the end of the season as a manufacturer's close-out. You can see where I'm headed when I attack the usefulness of retail, wholesale, or production prices as the basis for assigning value to a garment. Is it a good deal? you ask. First, you must decide what is of value to you. Next, you must learn enough about the class of items you are shopping to understand which are best aligned with your values. Finally, you must research the market to compare the prices of the items you have deemed acceptible. Price comes into play only in the last stage.
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