February 2, 2026
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Is Off-Price A Safer Growth Channel For Brands?
Taking opposite approaches to off-price selling, Carter’s is looking to drive growth while Puma is looking to reduce its dependence on the channel.
Speaking at the ICR Conference 2026 in mid-January, Douglas Palladini — CEO at Carter’s, whose wholesale brands include its namesake brand, OshKosh B’gosh and Little Planet — said department stores are “great lifelong partners of ours, but they’re not opening doors anymore.”
Growth will come from mass, where Carter’s already makes private labels for Walmart, Target, and Amazon, and off-pricers where the “Gen-Z mom” is increasingly shopping amid inflationary pressures. Palladini remarked, “What’s going on in off-price has been remarkable. The T.J. Maxx’s, the Burlington’s of the world. It’s been incredible to see.”
Richard Westenberger, Carter’s CFO and COO, added, “The off-price or the promo channel represents a considerable opportunity for us. That’s where she’s shopping today. That’s where my family is going to shop. And so we want to make sure we have a presence there.”
At Puma, however, officials have said the activewear brand needs to “consider the off-price channel as more of an opportunistic channel and less of a growth channel.”
Puma’s wholesale sales in the recent third quarter fell 15.4% due (in large part) to efforts to reduce exposure to off-pricers in the U.S. Arthur Hoeld, a former Adidas executive joined Puma in July 2025, said on Puma’s third-quarter analyst call that three of the brand’s largest global customers are considered off-pricers, or where “off season business is sold in a very wide distribution and in a not very brand enhancing manner.”
Freundt added, “We do believe that with a better brand positioning, we have room there for higher price points, but also for being way less promotional driven.”
Prominent Brands Moving Away From Off-Price Methods
Several other brands have also publicly indicated in recent years they’re de-emphasizing off-price channel sales in order to improve brand perception and boost margins.
Both Levi’s and Polo Ralph Lauren in 2019 revealed plans to reduce dependence on off-pricers, as well as promotionally driven department stores, and have recently stated that the increased emphasis on brand elevation and full-price selling has helped improve results. Nike, The North Face, Hugo Boss, Under Armour, Dr. Martens, Guess, and Steve Madden are among other brands that have stressed commitments in recent years to reduce promotional selling and sales in off-price channels.
Despite This, Off-Price Remains Lucrative
Any aversion to off-price comes as the channel has been steadily delivered above-average growth amid aggressive expansion. Since the start of 2000 through the third quarter of 2025:
- TJX Cos.’s U.S. store count across banners (TJ Maxx, Marshalls, HomeGoods, Sierra, HomeSense) increased 17% to 3763.
- Ross Stores’ store count across its Ross Dress for Less and dd’s DISCOUNTS banners grew 26% to 2273.
- Burlington Stores’ store count jumped 67% to 1,211.
- Nordstrom Rack’s store count expanded 21% to about 300 stores.
TJX, Ross Stores, and Burlington Stores have also indicated on recent quarterly analyst calls that healthy buying opportunities continue. Ernie Herrman, TJX’s CEO, said on TJX’s third quarter call ahead of holiday selling: “Availability of quality branded merchandise has been exceptional, and we are in an excellent position to flow a fresh assortment of goods to our stores and online.”
BrainTrust
Tom Ryan
Managing Editor, RetailWire
Recent Discussions
Discussion Questions
Is the off-price channel more viable and safer for brands to drive growth?
Should off-price still be considered ‘more of an opportunistic channel and less of a growth channel’ for brands?
How would you rate the opportunities and risks of off-price selling?
Poll
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Off-price is growing faster than overall retail and, across most categories, it is taking market share. So, yes, it is a more robust channel. However, the question for brands is whether they want to play in off-price. Some are happy to, others only want to play in a limited way – with special purchase products, and others don’t want any exposure for fear of ubiquity. There is no one clear answer as it very much depends on each brand’s overall strategy.
For branders the off-price channel is a double-edged sword. Unless you have great brand dexterity – it’s a really good way to cut your own throat.
Some of us may be old enough to remember tales around the retail campfire about Gitano -once a mid-level fashion brand – who signed a deal with Kmart. The result was a boost in sales and an erosion, some might say destruction, of both margin and brand identity.
If you want to go off-price channel … fine … just make sure your eyes are wide open.
I guess it all depends on how you define “growth”. If you are measuring in terms of units – off-price is great. Looking at margin, not so much. Looking at gross sales, fine and dandy. Looking at brand building, good luck.
One more thought.
Getting in to off-price channels is a lot easier than getting out of them. Once you train consumers to seek out your brand at an off-pricer, and that that price is the “should cost” price it’s hard to get them back paying full price.
I’m thinking this is one of those moments where we find out what a brand is all about: if it’s always been about high price – and, hopefully, the high quality that is behind that – and it suddenly is willing to go low…well than what does that say about its messaging ?
(Of course if that’s never been the case, then off-price may make perfect sense…or at least be an option)
The off-price channel can no doubt be a tool to help move volume when demand is uneven, but it also changes how shoppers think about your brand. Once people get used to seeing you at a discount, it’s hard to bring them back to full price.
Off-price will continue to be growth opportunity for many years. However, manufactures / wholesalers need to remain true to their quality and brand standards. The temptation to lower the quality of goods produced for outlets or other off price retailers must be avoided.
Off-price retail clearly has momentum where value matters most, and that isn’t surprising given persistent inflationary pressures and the way consumers increasingly trade down or trade smart. Off-price formats have proven resilient because they leverage the value foundation built by traditional full-price channels, giving consumers access to quality assortments at compelling price points. In that sense, off-price isn’t just opportunistic clearance disposal anymore — it’s become a meaningful part of the broader retail ecosystem, especially in tougher economic climates. But that doesn’t mean it should be viewed as the primary growth lever for brands; rather, it should be positioned as one important strategic element alongside full-price, direct-to-consumer, and partner channels.
Looking at it that way helps clarify why some industry observers still label off-price as “more opportunistic than growth.” Brands often drive volume to off-price when inventory needs clearing or broader macroeconomic conditions push consumers toward value-centric shopping. Off-price thrives on everyday pricing imbalances — it depends on a spread between what traditional channels carry at full cost and what can be sold at a discount. That spread creates value perception for consumers and enables off-price operators to capture incremental demand. But if brands over-rotate toward off-price as a core growth strategy, they risk diluting premium positioning, compressing margins, and undermining the brand equity narrative that requires a balance of full-price relevance and controlled discounting.
When rating the opportunities and risks of off-price selling, the upside is clear: it can accelerate demand during price-sensitive periods, expand distribution footprints with minimal incremental marketing investment, and help brands turn inventory into revenue faster than waiting for full-price sell-through. It also gives brands exposure to value-oriented shoppers who may not otherwise engage—and, when integrated with loyalty and data capture, can even fuel longer-term customer relationships. The risks, however, show up when off-price becomes the default rather than the complement. Overreliance on discount channels can erode pricing power, compress margins, and weaken brand stature over time. It can also create fulfillment and customer experience complexities if product assortments and expectations aren’t clearly managed across channels.
So while the viability of off-price as a growth element is strong in inflationary times, it’s healthiest when viewed as one piece of a balanced brand strategy — a format that captures incremental demand and showcases value without supplanting the full-price narrative or long-term equity building. When brands use off-price judiciously and in concert with other channels, they can benefit from its reach and relevance without losing the strategic leverage of their core positioning
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Off-price is growing faster than overall retail and, across most categories, it is taking market share. So, yes, it is a more robust channel. However, the question for brands is whether they want to play in off-price. Some are happy to, others only want to play in a limited way – with special purchase products, and others don’t want any exposure for fear of ubiquity. There is no one clear answer as it very much depends on each brand’s overall strategy.
For branders the off-price channel is a double-edged sword. Unless you have great brand dexterity – it’s a really good way to cut your own throat.
Some of us may be old enough to remember tales around the retail campfire about Gitano -once a mid-level fashion brand – who signed a deal with Kmart. The result was a boost in sales and an erosion, some might say destruction, of both margin and brand identity.
If you want to go off-price channel … fine … just make sure your eyes are wide open.
I guess it all depends on how you define “growth”. If you are measuring in terms of units – off-price is great. Looking at margin, not so much. Looking at gross sales, fine and dandy. Looking at brand building, good luck.
One more thought.
Getting in to off-price channels is a lot easier than getting out of them. Once you train consumers to seek out your brand at an off-pricer, and that that price is the “should cost” price it’s hard to get them back paying full price.
I’m thinking this is one of those moments where we find out what a brand is all about: if it’s always been about high price – and, hopefully, the high quality that is behind that – and it suddenly is willing to go low…well than what does that say about its messaging ?
(Of course if that’s never been the case, then off-price may make perfect sense…or at least be an option)
The off-price channel can no doubt be a tool to help move volume when demand is uneven, but it also changes how shoppers think about your brand. Once people get used to seeing you at a discount, it’s hard to bring them back to full price.
Off-price will continue to be growth opportunity for many years. However, manufactures / wholesalers need to remain true to their quality and brand standards. The temptation to lower the quality of goods produced for outlets or other off price retailers must be avoided.
Off-price retail clearly has momentum where value matters most, and that isn’t surprising given persistent inflationary pressures and the way consumers increasingly trade down or trade smart. Off-price formats have proven resilient because they leverage the value foundation built by traditional full-price channels, giving consumers access to quality assortments at compelling price points. In that sense, off-price isn’t just opportunistic clearance disposal anymore — it’s become a meaningful part of the broader retail ecosystem, especially in tougher economic climates. But that doesn’t mean it should be viewed as the primary growth lever for brands; rather, it should be positioned as one important strategic element alongside full-price, direct-to-consumer, and partner channels.
Looking at it that way helps clarify why some industry observers still label off-price as “more opportunistic than growth.” Brands often drive volume to off-price when inventory needs clearing or broader macroeconomic conditions push consumers toward value-centric shopping. Off-price thrives on everyday pricing imbalances — it depends on a spread between what traditional channels carry at full cost and what can be sold at a discount. That spread creates value perception for consumers and enables off-price operators to capture incremental demand. But if brands over-rotate toward off-price as a core growth strategy, they risk diluting premium positioning, compressing margins, and undermining the brand equity narrative that requires a balance of full-price relevance and controlled discounting.
When rating the opportunities and risks of off-price selling, the upside is clear: it can accelerate demand during price-sensitive periods, expand distribution footprints with minimal incremental marketing investment, and help brands turn inventory into revenue faster than waiting for full-price sell-through. It also gives brands exposure to value-oriented shoppers who may not otherwise engage—and, when integrated with loyalty and data capture, can even fuel longer-term customer relationships. The risks, however, show up when off-price becomes the default rather than the complement. Overreliance on discount channels can erode pricing power, compress margins, and weaken brand stature over time. It can also create fulfillment and customer experience complexities if product assortments and expectations aren’t clearly managed across channels.
So while the viability of off-price as a growth element is strong in inflationary times, it’s healthiest when viewed as one piece of a balanced brand strategy — a format that captures incremental demand and showcases value without supplanting the full-price narrative or long-term equity building. When brands use off-price judiciously and in concert with other channels, they can benefit from its reach and relevance without losing the strategic leverage of their core positioning