February 2, 2026
wolterke/Depositphotos.com
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.”
Hoeld 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
Ryan Mathews
Founder, CEO, Black Monk Consulting
Allison McCabe
Director Retail Technology, enVista
Perry Kramer
Managing Partner, Retail Consulting Partners
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
Loading …
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
A brand isn’t just a product; it distinguishes a product (or service or a person) from competitors. It represents the reputation and emotional connection built with consumers. A brand’s position is as much in customers’ minds as on the shelf.
That includes where one finds the brand. It is the neighborhood, folks. price
That doesn’t mean that certain brands should go off-price. That doesn’t mean that off-price is a growth opportunity for some. Off is an opportunity for some. Just as private label has grown, off-price will continue to grow. But if one is an upscale or even a mid-priced brand, talking about quality and reputation, an off-price location will hurt perception.
Off-price can absolutely support growth, but it is rarely a safer path by default. When customer budgets are under pressure, shoppers naturally gravitate toward off-price, which makes the channel effective for driving volume and managing excess inventory. Used intentionally, it can help brands stay visible and relevant without overextending full-price demand.
The risk emerges when off-price becomes the primary engine for growth rather than a controlled outlet. Over time, consistent discount exposure can reset customer expectations, pulling demand away from full-price channels and eroding both margins and brand strength.
In my experience, off-price works best when it is governed by clear rules and a defined role in the overall channel mix. Brands that treat it as a complementary lever, rather than a substitute for disciplined pricing and distribution, are far better positioned to balance near-term performance with long-term brand health.
Once upon a time, a brand would go to extreme lengths to disguise product that was sold to off price retailers, including cutting or crossing out labels to protect brand integrity. Then brands realized that running outlets with the addition of lesser quality and discontinued products created additional profit and revenue. This was then followed with the immediate discounting of brand new product for loyal customers, and finally anyone who could be sold. It is a very rare company who has avoided the temptation of discounting to spike sales. Off price retailers are simply part of the equation. Rare is the customer who pays full price for anything. They don’t have to.
It’s been a long time since consumers knew & trusted what a real “full price” is.
If that full price is/is not directly related to the cost of making the item.
(mSrp. “Suggested” retail price)
Gamified in every part of commerce.
Any surprise the consumer wants to game the system right back?
If they are willing to ‘hunt’ (sift through piles of stuff), they need assurance of quality at the end. Esp. as they may not find what they are looking for (or in their size).
Those known brand names (in the off price inventory) are the signal that value is to be found. A worth created for their endeavor.
This almost strikes me as a bit of a chicken and egg question. Since the off-pricers can buy almost any brand they want, doesn’t a brand have to have some level of recognition and distinction in the market to even be considered by the off-pricers? And how does a brand gain that level of recognition and distinction…??? By performing well in the ‘regular’ market. And if you’re performing well in the regular market, do you really want to risk diluting that by growing in the off-price market?
But, but…the middle market has collapsed…!!! If I don’t sell Walmart, Target or the off-pricers, the list of middle market retailers these days is a really short list! Right. And why is that? Because the off-pricers just spent the last 25 years taking market share. Sigh, I might as well sell the off-pricers. Gosh that was an easy arm twisting job.
Brands have really difficult choices to make in chasing growth these days. I like the choices made by Polo Ralph Lauren and Levi’s.
More Discussions
Would an Amazon Shift of Prime Day to June Be a Good Move?
Would it be a wise move for Amazon to move Prime Day ahead of its current…Should Amazon Be Banning AI Shopping Agents From its Platform?
Amazon is clamping down on access to its platform from competing AI agents.Does Macy’s Own Celebrations?
Macy’s has made a name for itself in terms of high-profile celebrations. Will that drive cross-over…
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
A brand isn’t just a product; it distinguishes a product (or service or a person) from competitors. It represents the reputation and emotional connection built with consumers. A brand’s position is as much in customers’ minds as on the shelf.
That includes where one finds the brand. It is the neighborhood, folks. price
That doesn’t mean that certain brands should go off-price. That doesn’t mean that off-price is a growth opportunity for some. Off is an opportunity for some. Just as private label has grown, off-price will continue to grow. But if one is an upscale or even a mid-priced brand, talking about quality and reputation, an off-price location will hurt perception.
Off-price can absolutely support growth, but it is rarely a safer path by default. When customer budgets are under pressure, shoppers naturally gravitate toward off-price, which makes the channel effective for driving volume and managing excess inventory. Used intentionally, it can help brands stay visible and relevant without overextending full-price demand.
The risk emerges when off-price becomes the primary engine for growth rather than a controlled outlet. Over time, consistent discount exposure can reset customer expectations, pulling demand away from full-price channels and eroding both margins and brand strength.
In my experience, off-price works best when it is governed by clear rules and a defined role in the overall channel mix. Brands that treat it as a complementary lever, rather than a substitute for disciplined pricing and distribution, are far better positioned to balance near-term performance with long-term brand health.
Once upon a time, a brand would go to extreme lengths to disguise product that was sold to off price retailers, including cutting or crossing out labels to protect brand integrity. Then brands realized that running outlets with the addition of lesser quality and discontinued products created additional profit and revenue. This was then followed with the immediate discounting of brand new product for loyal customers, and finally anyone who could be sold. It is a very rare company who has avoided the temptation of discounting to spike sales. Off price retailers are simply part of the equation. Rare is the customer who pays full price for anything. They don’t have to.
It’s been a long time since consumers knew & trusted what a real “full price” is.
If that full price is/is not directly related to the cost of making the item.
(mSrp. “Suggested” retail price)
Gamified in every part of commerce.
Any surprise the consumer wants to game the system right back?
If they are willing to ‘hunt’ (sift through piles of stuff), they need assurance of quality at the end. Esp. as they may not find what they are looking for (or in their size).
Those known brand names (in the off price inventory) are the signal that value is to be found. A worth created for their endeavor.
This almost strikes me as a bit of a chicken and egg question. Since the off-pricers can buy almost any brand they want, doesn’t a brand have to have some level of recognition and distinction in the market to even be considered by the off-pricers? And how does a brand gain that level of recognition and distinction…??? By performing well in the ‘regular’ market. And if you’re performing well in the regular market, do you really want to risk diluting that by growing in the off-price market?
But, but…the middle market has collapsed…!!! If I don’t sell Walmart, Target or the off-pricers, the list of middle market retailers these days is a really short list! Right. And why is that? Because the off-pricers just spent the last 25 years taking market share. Sigh, I might as well sell the off-pricers. Gosh that was an easy arm twisting job.
Brands have really difficult choices to make in chasing growth these days. I like the choices made by Polo Ralph Lauren and Levi’s.