E-commerce is roiling retail and nowhere is that more apparent than in apparel. Cowen & Co. estimates that Amazon’s apparel sales — including commissions on Marketplace transactions — totaled $22 billion, more than any other retailer in the country with the possible exception of Macy’s.
Fortunately for off-price and other mass apparel retailers, much of Amazon’s efforts are more upmarket. “The category is taking massive amounts of share,” says Morningstar analyst Bridget Weishaar, referring to such companies as TJX, Ross Stores, Burlington Coat Factory and Nordstrom Rack. “It is a trend that we don’t see turning around in the near future.”
Ross Stores, parent of Ross Dress for Less and dd’s Discount, is moving ahead aggressively with expansion. Plans call for an approximately 70 new Ross Dress for Less units this year and an additional 20 dd’s Discounts. The company is opening its first stores in Iowa this year while continuing to find new sites in states with its largest concentrations of stores: California, Florida and Texas.
“Looking ahead, we remain confident that over time, Ross can grow to 2,000 locations and dd’s Discount can become a chain of 500 stores,” says Jim Fassio, president and chief development officer at Ross Stores.
H&M is toning down its aggressive growth plans of adding 10-15 percent more bricks-and-mortar stores each year in favor of localizing expansion both in terms of physical stores and e-commerce. In the U.S., a traditionally strong market for the Swedish retailer, the target is to raise total sales 10 to 15 percent in dollars, though exchange rates could affect the results.