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Can Amazon’s Private-Label Apparel Catalyze Future Growth?

12 February 2016

Bidness Etc:

Amazon.com, Inc. has already launched its self-branded smartphones and tablet, but Pacific Crest believes that the e-commerce giant is pushing deeper into creating its private-label apparel, especially to provide clothing items that are currently not accessible at other brands. Based on the growth opportunities present in the apparels category, the firm reiterated its Overweight rating on the company’s stock, along with an $800 target price.

The firm’s premise is based on the assessment of Amazon’s recent job openings. The e-commerce company’s website has numerous openings present in a department labeled “Amazon Private Label team.” The division is looking for brand managers, merchandisers, and inventory planning managers, which indicates that the company is in the process to lay down foundations to expand into private-label apparel industry.

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Having its own clothing brand will Amazon facilitate establishment of higher gross margins and profits, which is common with the private-label apparels’ approach. It ability to scale operations can also drive more meaningful and efficient cost-cutting structure.

The online retail giant enjoys a huge consumer base in apparel space, as more than 40 million consumers are dealt at Amazon Fashion. This platform includes famous brands, such as Van Heusen, PUMA, and Calvin Klein. The company could now use its own apparel line as a bargaining chip against other famous fashion labels, which currently refuse to sell via Amazon, due to its aggressive cost-cutting strategies and lowered margins.

Amazon’s own fashion line could fill in for unavailable brand products on its online platform, and the sales can reduce the traditional players’ market share. At the WWD Apparel and Retail CEO Summit in October, last year, the company’s fashion VP Jeff Yurcisin stated: “When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that.”

Link to the rest at Bidness Etc

PG has purchased several electronics and photographic items from Amazon Basics and been pleased with both the price and quality. He’d buy an Amazon t-shirt.




2 Comments to “Can Amazon’s Private-Label Apparel Catalyze Future Growth?”

  1. When I needed an HDMI 2.0 video cable that could actually handle 4K UHD at 60hz 4:4:4 chroma I first tried my local big box national chain retail store that purportedly specializes in and offers such… two $40 supposed 2.0 cables later (returned for refund), that only worked intermittently, I went with an AmazonBasics cable for $8 that works perfectly. Gosh, wonder where I’ll turn next time I need cables… Sad thing is I was prepared to shop local and pay more…

  2. The charging cable for my MacBook Air started to fray within the first year. I wrapped the fraying part (immediately adjacent to the magnetic connector at the computer end) in electrical tape and soldiered on.

    My husband suggested I buy a replacement cable, but I choked at the $80 price tag.

    But I worried about my jury-rigged repair. Had I created a fire hazard?

    If Amazon had offered a private-label option for a more reasonable price, I’d have snapped it up. When I saw a RoseLan version for $40 right before Christmas, I did snap it up.

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