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POLO.COM SALE

Discussion in 'Classic Menswear' started by oldskool, Dec 21, 2004.

  1. oldskool

    oldskool Senior Member

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    If anyone is in retail, I have a question, please. It would seem to me, that the below suit I purchased from polo.com, originally marked (POLO RALPH LAUREN Black Chalkstriped Suit$1195.00) that I purchased for $ 440.47 (37% of original retail) is an item that any retailer simply lost money on. Assuming the 100% markup typical in retail. (i.e. if an item comes in at $1, the store has a retail price of $2). My question is since we buy off polo.com, are we in fact buying from the manufacturer? Or is polo.com simply another retailer, albiet one owned by the manufacturer. Or is the suit manufactured by someone else entirely and then sold to polo.com and then sold.

    In the end, what is a "good price"?? I am so used to paying for clothing with these large markdowns, I am wondering how the business operates and makes money. Is the suit really worth $50, and the retail price is all marketing?

    Thanks for your patience and explanation on clothing retail.

    Item: 510012644530
    Description: Black Chalkstriped Suit, Black Pinstripe, 44 REGULAR
    Quantity: 1 @ $ 440.47
    Status: Shipped via: FEDX - FedEx Home Delivery
     


  2. discostu004

    discostu004 Affiliate vendor

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    i'm not a retailer, but i'm under the understanding that a piece that cost $1 to get in is going to retail for at least $2.50 and sometimes more
     


  3. johnnynorman3

    johnnynorman3 Distinguished Member

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    Polo.com is Polo, and the products are the same, though the website often has things not carried by stores or that are carried in small quantities in stores. For the most part, the Polo Mansion will have every item that is on the website. The website can offer lower prices than the store because it does not have the bricks and mortar costs associated with it, and perhaps because Polo uses it as a loss leader (though this is merely a guess).

    The suit you got is not "worth" $1150. Its intrinsic value is simply not that high. However, in terms of what that suit cost to produce, my sense is that the wholesale cost of the fabric was probably in the neighborhood of $250, with the amount of labor put into constructing it probably being less than $150. But remember, this is because of economies of scale. I doubt highly that you could buy 3 yards of that fabric for $250 and pay Corneliani to make it for you for $150.

    In the end, the suit you got was for both a good and bad price. It is a good price because it is a nice suit, albeit fused, that has an excellent cut, good fabric, and is from a reputable dealer to whom you can return ill-fitting items. It is a bad price because, for example, I got a similar looking Purple Label suit off of Ebay for only $125 more than the Blue Label suit you bought. However, I ran the risk of the suit not fitting, etc. and was lucky as hell to find it on Ebay, where you can literally spend months without seeing anything in your size that is both attractive and a bargain.

    Your suit in my opinion is the best fused suit out there, and you should be happy with it if it fits. I must say, however, that the Brooks Brothers Golden Fleeces that the 346 Madison store has on sale for $700, which will be less than $600 for the early bird special on the 26th, are a better deal and better made. If you are in NYC, I'd suggest you look there. They have a bunch of the outstanding "Made in Italy" Golden Fleeces on the 4th Floor, which are made by Cantarelli.
     


  4. Mike C.

    Mike C. Distinguished Member

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    Is there a current code for Polo.com?
     


  5. FIHTies

    FIHTies Distinguished Member

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    Lets assume for the sake of discussion that your figures are correct.  It costs them one dollar and they sell for 2 at 100% markup.

    I will give you an oversimplified understanding of a typical retail business.

    I buy 10 Polo suits for a dollar.  I sell 5 at full price of 2 dollars.  I have now covered my cost for these suits.  Anything that I subsequently take in on the remaining 5 suits , is "PROFIT".  (Above my cost in this simplified understanding). I can now after covering my cost afford to discount these suits to .35 cents a piece and I am still making money on these suits.

    Of course it doesnt quite work that way (factor in all your overhead, and costs of running the retail operation marketing, unsold inventory, staff, additional costs, (and dont misunderstand me, there are gobs of those) etc, and you have your basic retail business.

    JJF
     


  6. topcatny

    topcatny Distinguished Member

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    Having worked for both retailers and manufacturers I will see if I can explain.

    Polo.com is owned and run by Polo Ralph Lauren. Polo.com and the Polo stores themselves sell items at similar retail prices that department stores and specialty stores would sell them for. The typical markup for retail stores is keystone, which is 2 times the wholesale price. Sometimes it is even higher than that but this will make it easier to explain. (In retail speak Keystone, or 2x wholesale, is 50% markup as they calculate the percent of the selling price that is profit and call that markup. So if you buy something at $1 and sell it for $2, that is a 50% markup, why regular math and terminology wouldn't work for the retail trade I do not know.)

    Manufacturers also work on a similar profit margin, anywhere from 40% to 60% of the price retailers pay for goods is profit to the manufacturer. But we will use the average of 50%.

    If you take your suit which had a retail price of $1195, the wholesale price would have been approximately $597.5. Polo then probably paid approximately $298.75 to Corneliani to have it made.

    So on paper Polo would have still made money. Albeit not as much.
     


  7. imageWIS

    imageWIS Stylish Dinosaur

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    As far as I understood from various sources, most or all full retail RL Polo stores are in one way or another loss leaders, not including the Polo outlets and Club Monaco stores / outlets. And that in fact most of the revenues generated by the Polo RL Corp. is from selling wholesale to department stores, i.e. Federated, Saks, NM Group, etc...

    Jon.
     


  8. topcatny

    topcatny Distinguished Member

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    The full price stores may not make much money. But that is because of the enourmous cost of running a retail store, Rent, employee expense, decorating (which in the Ralph Lauren stores is very expensive), not because they undercut prices.

    The full price stores serve as advertising as well as a place to buy the merchandise. The entire store is a testament to the image that they want to convey and they spare very little expense in getting that point across. They do not sell the same items or similar items for less in their own stores. If they did that it would destroy their department store business that they have worked so many years to build.

    Incidentally, doing business with Fedrated and May Company department stores is often not that profitable for many brand names.
     


  9. drizzt3117

    drizzt3117 Stylish Dinosaur

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    I think Polo makes quite a bit from their own outlets, especially from selling the generic polo shirts. That is a huge percentage of their revenue in the Polo stores as well.
     


  10. VKK3450

    VKK3450 Distinguished Member

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    Dohhhh, Are the Polo by Corneliani suits really fused?

    I was under the impression that they were canvassed and I bought one in the November sale. Granted I havent seen it yet as it is sitting at my sister's until I can have someone huff it over to Europe.

    Not to hijack the thread, but what's the verdict then? Fused suit of acceptable quality for the money (500) or send it back to Ralph???

    K
     


  11. johnnynorman3

    johnnynorman3 Distinguished Member

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    Canvassed lapels, but fused body. The canvas in the lapel is very important to have, so on that score the Polos are far superior to a fully fused suit like Boss. As for the fusing in the body of suit jacket, it is the lightest I've seen. Moreover, the pressing that is done on the suit is very good, so despite the fact that it is fused, it does shape very well to the body. In addition, the styling is absolutely first rate in my opinion -- a terrific shoulder in particular. It has enough other details that show some handwork -- like picking at the lapels that is very well done -- that $500 is a decent purchase.
     


  12. imageWIS

    imageWIS Stylish Dinosaur

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    According to the RL website, net sales for their wholesale division for 2004 were $1,210 million, whereas net sales for their retail stores came to $1,170 million for the same year. Alas only $269 million was sold through licensing.

    So, I guess they do make money with the retail business; of course most of the stores are outlets...

    Jon.
     


  13. zjpj83

    zjpj83 Distinguished Member

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    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.
     


  14. imageWIS

    imageWIS Stylish Dinosaur

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    Really? The Polo outlet in Sawgrass Mills has nothing priced that inexpensively.

    Jon.
     


  15. zjpj83

    zjpj83 Distinguished Member

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    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.
     


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