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Headed to an outlet mall?

Watch out for inflated prices, damaged goods and pseudo deals.

By Karen Datko Jan 25, 2010 12:46PM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

Outlet malls have a reputation for big-name brands and low prices. Now, shoppers can add Bloomingdale’s to their list of potential bargains.

 

Parent company Macy’s announced last week that it will open four Bloomingdale’s outlet stores before fall, in Paramus, N.J.; Miami; Sunrise, Fla.; and Woodbridge, Va., with more locations planned for 2011. The outlets will sell clearance items from the mainstream Bloomingdale’s stores.

 

Considering that competitors Saks, Neiman Marcus and Nordstrom already have booming outlet divisions (Off 5th, Last Call and Nordstrom Rack, respectively), Bloomingdale’s move is more about opportunity than desperation, says Kim Picciola, a senior analyst for Morningstar who covers the retail sector. “They can really use outlet locations to unload excess inventory,” she says. Bloomingdale’s outlets will also expand the brand’s customer base, because outlet malls tend to draw more value-oriented crowds.

 

But in the struggling economy, the eye-popping deals shoppers have come to expect don’t always materialize, says Howard Davidowitz, the chairman of Davidowitz & Associates, a national retail consulting firm and investment bank based in New York. Retailers and designers have scaled back inventory amid slumping sales, which leaves less overstock. Some of that may go instead to discount stores such as T.J. Maxx, sample sales and even charity.

 

Many brands -- including Coach, Ann Taylor and Brooks Brothers -- fill the gaps with outlet-only lines that they sell at full price. “You bought a Coach bag for $200; well, OK, but is that the same bag that’s in stores for $600?” he says. “You have to be sure you’re getting a comparative value.”

 

Use these six tips for make sure you’re getting the best deal:

 

Dig for discounts. A few minutes at the outlet mall’s Web site can yield savings of 30% or more. For example, outlet mall developer Chelsea Premium Outlets offers a free VIP Club with coupon booklets, exclusive online coupons and sale notifications. On an impromptu outlet mall visit, stop by the visitor’s center or office first. That’s where you’ll find coupon booklets and details about current sales and discounts.

Shop with a plan. Searches for the latest trendy fashion items or a replacement for last season’s sweater could be equally fruitless if you’re not visiting the right retailers. Haute couture designers almost always stick to overstock from previous collections, while home-goods brands lean toward a mix of discontinued and damaged pieces. Discount and midrange clothing retailers tend to offer current season, outlet-only lines.

 

In most stores, finding deals literally requires combing through rack after rack of leftovers. “There’s so much to sort through, and it’s really hit or miss,” says Rachel Weingarten, a New York-based stylist and personal image consultant. To avoid burnout and overbuying, prepare a list of items you’re looking for before you leave home. “The trend pieces are usually weird,” Weingarten says. Stick to classic styles you can wear for years.

 

Charge your cell phone. Outlet-only lines aren’t always recognizable as such, and original retail prices are often inflated. Use cell phone apps to compare styles and prices of outlet items against those currently in stores, says Linda Arroz, a stylist based in Los Angeles. Make sure the discount is at least 25%. “Otherwise, you could just shop sales at the mall,” she says.

 

Check quality. Outlet stores are a mix of items, and that can include factory seconds (items that didn’t pass quality control) and damaged store goods. Check the quality of items carefully, especially those stickered as irregular or flawed, to decide if the price is worth a slightly warped pan or the tailoring cost to fix a wonky seam. “Don’t hesitate to ask for an extra discount,” says Cheryl Holland Bridges, the director of the Center for Retailing Studies at Texas A&M University in College Station, Texas.

 

Review the return policy. “At a lot of the stores, all sales are final,” Arroz says. Stores that do accept returns may do so for store credit only -- and you must make those returns at the outlet and not the regular store.

 

Shop sales. Outlets follow the same schedule as mainstream retailers, so time your trip to take advantage of sales near holidays and toward the end of a season. Most stores also have clearance racks for the deepest-discount products.

 

Related reading at SmartMoney:

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