This is a great category for Costco – the results speak for themselves. The risk is that brands become devalued being sold in warehouses off pallets; the upside is sell through – Costco moves tons of product. Historically, warehouse clubs were reluctant to pursue the clothing category since selling goods off pallets didn’t seem to make sense for clothing, and especially not premium brands where image matters – selling Gucci from off a pallet is an affront to the brand.

However, over the years, Costco has proven that it can successfully sell apparel and footwear in its warehouses, and its very liberal returns policy helps make this possible.

Surely we can remember the still-valid expression “category killer.” If Costco decides that it wants to be a category killer in some apparel, everyone else beware.

Some of the apparel I have seen at Costco (from underwear to socks to sweaters) is of very good quality and the value even higher when one considers the price at which Costco sells it. This retailer has an uncanny ability to figure out the highest value at which it can still make a steady profit, and its merchants are as disciplined as any or more so.

You can get some great deals on name brand apparel at Costco, but it is probably more “opportunistic” than a “treasure hunt.” Since they don’t have the breadth of styles and colors of a TJ Maxx or Ross Stores, shoppers aren’t typically substituting Costco for the off-price stores. While they shop at Costco for their weekly “Costco run” they stroll through the apparel sections and will sometimes find a great deal. However, it usually isn’t a destination for apparel.

As Costco continues to elevate the brands it offers, more shoppers will start to think of Costco as a viable store for apparel. They may potentially try testing an apparel-only store concept.

Costo is an opportunistic retailer in fashion. It finds products it thinks will shift, buys in bulk, puts them in its stores and watches them fly off the pallets or shelves. By virtue of its scale, it generates massive revenues off the back of this opportunistic model.

The potential losers are the apparel stores Costco shoppers may also visit which from our data includes a very diverse range of retailers from the off-price stores to higher end brands. In my view, however, the main loser is the middle market: that’s the part where people will trim spending because it’s the part that adds no to little value to persuade consumers to spend.

There are certainly the occasional “fashion treasures” to be found at Costco — and the possibility of said treasures is definitely part of the appeal of a visit to their warehouses — the foundation of this category for Costco is really “apparel” (not “high fashion”). They excel at developing assortments built on value-based apparel and footwear styles, which I am not embarrassed to admit have recently become a fairly sizable percentage of my closet! Given the empirical (and anecdotal results) I don’t expect major changes to their strategy in the near future.

Costco knows its customers, whether for wine, frozen food or apparel. They have disposable income but also an eye for value. And the bulk presentation on tables and pallets makes apparel an easier “shop” than in the typical off-pricer. Given this, I expect to see more and more brands using Costco as an outlet.

The most important element of the treasure hunt is the quality of the merchandise, and Costco delivers. And men, many of whom hate to shop for clothes, can keep their wardrobes up to date while on a quest for steaks or wine. Everyone wins.

Amid the hype about online shopping, we forget that Costco and Sam’s Club are the most critical reasons department stores suffer. Most of the things I used to shop for at Macy’s (well, Meier and Frank) are now things I buy at Costco. Vacuums. Electronics. I even bought fly fishing gear at JC Penney’s long ago.

Now Costco is winning with clothing. A final nail in the coffin of the mediocre middle? We shall see. But I fear most for the department stores.

I respectfully think this may be the wrong question. Costco isn’t likely to open full line, heavy inventoried apparel or footwear sections. Their model is buy big, sell fast. This allows them to feature the hot brand and encourage “treasure hunting” but solves the problems more conventional apparel and footwear retailers face. Can they do more? Of course, but they’ll stick to skimming the cream.

Costco members trust the company to deliver the goods at the best possible prices and service. Costco is not concerned with breadth of assortment, rather the company takes big bets on reasonably priced high quality merchandise. The treasure hunt atmosphere further ignites the desire to buy now before it’s gone.

Department stores have been victims of Costco’s successful strategy and execution. Costco is also eating into specialty formats and the broader supermarket perishable offering as well as health and beauty care. As long as value continues to be delivered via sharply-priced high quality products and wrapped in superior customer service, Costco will thrive and their members will enjoy bragging rights to premium products and services.

Adidas sneakers, Birkenstock sandals, Lucky Jeans, North Face jackets and Ugg boots? My local Costco needs to get on the bus. It still has tables of Gloria Vanderbilt capris.

Costco has the ability to become a “category killer” when you least suspect it, whether, for meats, wine, and now apparel, they have the secret formula consumers seek out. Costco customers have an expectation for value and quality that Costco knows how to meet. In theory, it’s opportunistic as most people don’t wake up saying, “I need new clothes, let’s go to Costco” — but they do shop at the warehouse regularly and are more than willing to pick up a few apparel items they see on the spot. It’s a win-win for Costco and consumers, as well as a win for the brands that sell through Costco.

Who loses? I suspect it’s department stores more than anyone else — specialty apparel brands will continue to attract customers for their uniqueness, but department stores already have an identity crisis and this just adds to it.

Costco has mastered the key item basic business across the fashion spectrum. Costco, quality fabrics and construction for a low price, covering multiple tastes and styles in just a few SKUs.

Smart shoppers immediately “get” Costco solid color basics. The same basics sell at department stores for four times the price. Plus Costco takes returns, no questions.

Having personally designed and built products globally, Costco basics [difficult to discern what brand when worn] have already impacted major department stores.

Costco will continue its strong growth in apparel basics. Costco will be making a mistake if it veers off course in an effort to sell real fashion, leaving Costco sitting with a bunch of prints, patterns, and silhouette markdowns. My advice to Costco: stay in your lane.

Two points that I think are missed when we talk about Costco and clothing sales. One they are not in the apparel business, they are in the appeal business. Secondly their profit does not come from what they sell, it comes from membership fees. All they want is traffic that will buy and I don’t think they care what you buy as long as they can offer value and create volume.

As a “delighted” member since joining my local Costco store back in Portland, OR in 1985, one of the very few retailers my (now) family would agree has not only earned our loyalty, but has even become a consideration in “how far to the nearest Costco?” moves since, to Seattle and now, Dallas. Fashion is too broad a term here, in terms of apparel shopping missions (trips). I would suggest that Costco has actually reached destination trip status with many consumers in terms of Basics. You know, the undergarments that consumers naturally buy in bulk anyway (socks, undergarments) and appreciate quality, even some variety — whether male, female, or child. Costco has now become a destination for many in the Basics — this is the anchor, and the greatest category killer and competitive reality as they stock these items day in and day out at an unbeatable price/value equation. Then there’s the convenience trip — this is where Costco recognizes for men, they can simplify (and help avoid the dreaded mall) to look see, or… Read more »

Costco’s ability to move merchandise can’t be easily dismissed. While apparel and footwear aren’t the usual segments that drive shopping trips to Costco, the ability to get the merchandise in front of so many customers is definitely valuable. As Costco elevates the brands it offers customers, it will drive customers to think of Costco as a valuable resource for name brands. The big challenge is that customers can’t come in and search for specific items, it is more of a reactionary way of shopping as you never know what you may find available that day.

Costco always had an assortment of apparel of limited quantity and their product quality has been good. I have picked up a few things from time to time especially in casual and workout clothes. They also have limited assortment of jewelry and watches too. They do a good job to get the shoppers to always stop by to browse