Private Labels Are Grabbing Retail Share, Attracting The Likes Of Amazon

Shoppers seeking quality clothing without the name-brand cachet are reshaping the way retailers approach apparel and drawing new players into the store-brand game, such as Amazon.

Amazon joins the likes of Walmart, Target and other retailers in expanding their clothing lines as shoppers move away from the loyalty they once had to branded stores, such as Gap or Nike, Bloomberg reports. All are looking for a larger piece of the $275B apparel market.

The attention to private label clothing parallels what is going on in malls, where department and specialty apparel stores are closing their doors as discounters, such as T.J. Maxx or Marshalls, continue to thrive. But Amazon will move past T.J. Maxx owner TJX and Macy's this year to net the second-largest footwear and apparel sales in the U.S., according to Wells Fargo.

The addition of private labels that do not skimp on quality poses a greater threat to name-brand retailers as shoppers — particularly millennials — care less about logos or even the need to try on certain kinds of clothing.

For Amazon, the trend is an opportunity to capture business from two sources. The e-commerce giant is presenting itself as the best bet for name-brand companies to sell their clothing to consumers who often start — and frequently finish — their shopping online. At the same time, the company is introducing a list of private labels to capture those sales.

“We don’t expect private labels to become fashion houses, but they can create enough newness that they can capture sales,” consulting firm A.T. Kearney partner Adheer Bahulkar told Bloomberg. “Competing with Amazon is a losing proposition.”