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Amazon is significantly pruning its wide range of private brands as it battles both bloated overhead costs and antitrust scrutiny.
As first reported by the Wall Street Journal, Amazon is eliminating 27 of its 30 apparel brands, leaving it with just Amazon Essentials, Amazon Collection, and Amazon Aware. Its Rivet and Stone & Beam furniture brands are also being dropped.
Amazon insinuated that the move was a merchandising decision.
"We always make decisions based on what our customers want, and we've learned that customers seek out our biggest brands — like Amazon Basics and Amazon Essentials — for great value with high-quality products at great price points," said Matt Taddy, VP of Amazon Private Brands, in a media statement.
Taddy added that the products being cut "aren't resonating with customers."
Critics have charged that Amazon doesn’t invest in enough brand building around its private labels, in part because of its extensive lineup. As of 2020, Amazon had over 45 different private-label brands.
The private-label streamlining is also believed to be part of broader moves to slash expenses as sales have slowed following the pandemic-induced surge. CEO Andy Jassy has targeted some of Amazon’s more unproven bets as part of the cost-containment efforts.
However, in-house brands are also at the core of investigations launched by U.S. and European regulators over the alleged abuse of Amazon's dominance in online shopping. Amazon has been accused of giving advantages to its own brands in search listings as well as copying bestsellers sold by third-party merchants based on internal sales data.
Several reports felt it was more than a coincidence that the private label consolidation comes as Amazon representatives are scheduled to meet with the FTC this week in a “last-rites” meeting, typically a final step before the agency votes on filing a lawsuit.
Reports arrived last year that some of Amazon’s executives were open to exiting private labels altogether to avoid extensive fines and more constrictive penalties.
Stacy Mitchell, a co-executive director of the advocacy organization Institute for Local Self-Reliance and an Amazon critic, told the New York Times last week, “What we need to see from the FTC is a case that targets the core of Amazon’s monopolization strategy.”