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largest club companies operated a total of 64 outlets. Stores selling the designated products below the specified minimum price were subject to prosecution and fines. To please their suppliers, in the early days conventional off-pricers scissored manufacturers labels from their merchandise so that customers could not be sure what brands they were buying. In addition to more active promotion and a move toward the private label, department stores and some manufacturers have pursued combative strategies to halt the off-pricers. It plans to be operating 100 stores by 1986. Some of the independent off-price retailerssuch as the Dress Barn, Burlington Coat Factory Warehouse, and Symsbecame public corporations in 1983, often at prices more than tire discounters 30 times earnings. Kumar, Yashoda Bhagwat, and Xi (Alan) Zhang (Journal of Marketing, July 2015) A version of this article appeared in the March 2016 issue (pp.2223) of Harvard Business Review. A version of this article appeared in the May 1985 issue of Harvard Business Review).

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The impetus for their recent phenomenal growth came from the demise of fair-trade laws, adverse economic conditions, strong demand for widely recognized brands, and continuing consumer disenchantment with traditional retailers. In fact they generally stayed longer, and customers who defected because of pricebehavior suggestive of fickle deal seekersstayed the longest of all. Burlington Coat Factory Warehouse filed suits against Interco,.H. The independents buy merchandise at steep discounts and sell it 20 to 60 below department stores markups. At the time of writing, Ross had a chain of 66 stores in California and planned to open 20 new units in the West. Most OP soft goods sellers still refrain from advertising by brand, although most do leave the labels in clothes destined for the selling floor. When the recession of 1982 left many producers with idle capacity and big inventories, off-pricers urged the manufacturers to sell them in-season, first-quality goods. Their approach is to build from scratch, investing in prime real estate and adopting the typical mall architecture and construction. (Other businesses plagued by churn include insurance companies, gyms, and online streaming services.) Companies with high churn typically spend vast sums on marketing to try to replace all those defectors. Off-price apparel stores have also changed the way they merchandise and advertise their goods. Rather than how much money you made from those customers.

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