Factory outlets become a parallel chain to sell the `not so fresh' collection. Pant says in the franchisee kind of environment, the franchisee picks up garments at say a price 45 per cent lower than the MRP and sells it at 35 percent lower.
"The better pull a brand has, the better it does in factory outlets, because consumers like to be associated with the brand," explained Pant.
"Ideally a company should not have surplus. But if stocks get accumulated, it's always better to route them through the factory outlets. One set of consumers buys my brand both in factory outlets and in premium stores on high streets. It certainly is important to be there and offer the same brand proposition there as much as possible," said Shumone Chatterjee, Country Manager, Levi Strauss India.
Sales contribution
For Levi's, factory outlet sales contribute 5-7 percent of its total annual sales. For Indus League, 6-7 percent of its turnover comes from factory outlets.
Generally about 25 percent of annual sales come from factory outlets for any brand, said Venkatchalapathy of Arvind Brands.
Though Blackberrys, men's premium apparel brand does not have a presence in standalone factory outlets, it is seen at Brand Factory. Sales recorded is Rs3-5 lakh per month per outlet, says Badal Chaudhary, GM, Marketing and Sales.
Internationally, factory outlets have done well, with brands recording sales close to 20 percent in these retail formats.
Some global big names in factory outlets are Chelsea, Tanger Fatctory Outlet, Belz Enterprises, Prime Retail, McArthur Glen Designer Outlets and Bicester Village.
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