Ann Taylor Factory and Loft Outlet are launching e-commerce sites, at the domains LOFTOutlet.com on Tuesday and AnnTaylor.com/factory on June 26, owner Ascena Retail Group said in a press release emailed to Retail Dive.
They will sell the same products that Ann Taylor Factory and Loft Outlet shoppers can find in those banners' outlet stores, the company said.
The company continues to struggle, especially in its "value segment," though it narrowed its net loss in the third quarter to $40 million from $1.03 billion in the year-ago period. Comparable sales declines in the period drove gross margin down to $883 million or 58.7% of sales, down from $948 million or 60.6% of sales a year ago.
There's a certain level of art to outlet apparel retail, which often draws fans of a brand who are also in search of big discounts. The challenge is to protect the prices and margins at the flagship, and, for many apparel retailers, that's increasingly accomplished by producing merchandise specifically designed and manufactured for outlet stores.
"There are two strategies to off-price that we see a lot of brands taking — one where product that was over-supplied or returned from primary retailers are then put into a secondary, off-price retail channel, who can then move that merchandise at lower prices," Danny Essner, senior vice president of marketing at wholesale platform NuOrder told Retail Dive in an interview. "The other model is retailers taking a more strategic approach, creating sub-brands specific to channels and sometimes even specific to retailers."
Asked for a clarification on whether the websites will sell the first or the second, a company spokesperson told Retail Dive in an email, "For now, we will be offering the same products that our clients can find in-stores at Loft Outlet and Ann Taylor Factory. Whether a client shops at our full-priced or outlet locations, in-store or online, we aim to deliver on her expectations for high-quality, feminine, versatile, modern clothing for a timeless wardrobe. At Ann Taylor Factory and Loft Outlet, we design merchandise with our Ann Taylor and Loft aesthetic that our clients expect, at a great price."
That's a particularly difficult needle for Ascena to thread because the conglomerate already plays in three distinct segments: premium (which includes Ann Taylor and Loft), discount (which includes Dressbarn and Maurices) and plus-size and children's (including its Lane Bryant, Catherines and Justice brands). If Ann Taylor and Loft merchandise is that much easier to find with its outlets online, that blurs the line between "premium" and "discount."
For some, the idea may be to lure customers, including younger customers with lighter wallets, to a brand, in the hope that as their spending power increases, so will their willingness to frequent the flagship instead of the outlets. But, as Victoria's Secret is now likely finding with its own sub-brand, PINK, that doesn't always happen.
Ascena may be playing with fire, considering the positioning of its various banners. Dressbarn might be moving too far upscale, according to GlobalData Retail Managing Director Neil Saunders, but the company’s premium Loft brand improved sequentially through the most recent quarter with a better balance of key fashion items and executives expressed confidence it would return to growth in the current quarter. And new plus-fashion initiatives are also outpacing expectations, according to Ascena brands president and CEO Gary Muto.
The move announced Tuesday is simply a matter of serving the customer where she wants to shop, and will help the brands expand, Muto said in a statement. "The new factory and outlet websites will enable us to enhance the shopping experience for our existing clients and introduce our brands to new clients," he said.