Long tour buses pull in to the Desert Hills Factory Stores outlet mall several times a week and disgorge 45 people or more for a bargain-hunting expedition. Wearing comfortable shoes, cool clothing and looks of determination, the shoppers briskly fan out to the complex's 55 stores.
No distractions here. The pink stucco mall stands alone on the sand in Cabazon, 15 empty miles from Palm Springs and a long way from anyplace else. Visitors can concentrate on getting a great deal--up to 70% off, as the outlet promoters promise.
Manufacturers outlet centers dot the country. They number more than 300 nationwide, five of them within a few hours' drive of Orange County--in Commerce, Ontario, Lake Elsinore, Cabazon and Barstow. And they house 8,000 stores, including some big names that appear over and over: Polo, Anne Klein, Adolfo, Geoffrey Beene, Eddie Bauer, Bugle Boy, Hanes, Nike, Oneida, Corning.
These centers have legions of fans, most famously First Mother Virginia Kelley, a longtime regular at the Hot Springs (Ark.) Factory Outlet Stores because, she has said, "(I want) the best deal that I can get."
But they also have their detractors. Some people complain that many manufacturers no longer sell overstock or irregular goods at cut-rate prices. Instead, they just produce more of their regular goods, or even special, less expensive goods, to fill the outlets. And there's no great need to price those items for a quick sale.
No matter. Factory outlets are expected to sell $8.3 billion worth of goods this year.
"It's becoming less relevant whether they're 'outlets,' " says Ira Kalish, an economist for Management Horizons, the retail consulting arm of Price-Waterhouse. "It's a 'Field of Dreams' mentality: If you build it, they will come."
The first outlets were bare-bones stores next to the factory where manufacturers sold off damaged goods, odd sizes or excess inventory. Even those built later at other sites were " 'vanilla boxes,' four white walls with some pipe racks," says Dawn Frankfort, editor of the "Joy of Outlet Shopping," an annual guide published in Clearwater, Fla. "You had to suffer because you were getting good prices."
Over the past 10 years, that scene has changed. In the early '80s, developers began building stylish multitenant malls of nothing but manufacturers' outlets. Outlet shopping became fashionable, Frankfort says, thanks to an '80s love of designer labels and brand names and a '90s need to save money.
The malls gave manufacturers a good, even chic way to sell off excess inventory in "a controlled environment," says Lisa Engler, president of Esprit's retail division, which has a dozen outlet stores, including one in Cabazon. "You control the pricing, timing and presentation, which is important, particularly when you're an image company."
Indeed, outlets started as a place for manufacturers to unload unsold or irregular goods, Kalish says. "But they found they could sell first-quality merchandise, too, and they needed to, as there were fewer department stores, the (department stores) market share was shrinking and they were purchasing from fewer vendors," he says. "For some manufacturers, (the outlets) may be part of a strategy to keep all their eggs out of one basket."
Now outlets may contain a mixture of unsold inventory or flawed stock from the factory and merchandise made strictly for outlet distribution.
"Manufacturers are getting into the retail business as just another way of selling their merchandise," says Janet Morgan, a Los Angeles business owner.
Harry and David, a Medford, Ore.-based company specializing in mail-order gift food, sells blemished baked goods alongside flawless ones produced for its four outlet stores, including one in Cabazon, the company says.
Along with overstock from retail stores, Esprit outlets carry "some basic items--T-shirts, for example--that we can't count on having left over." So the company produces enough for the outlets as well.
Manufacturers with dozens of outlets are likely producing merchandise just for the outlets. "When you get into numbers, big numbers, it's definitely planned production," says Elysa Lazar, publisher of the annual "Outlet Shopper's Guide."
Some manufacturers even \o7 create \f7 new merchandise exclusively for their outlets, Frankfort says. The Gap recently introduced a special, less expensive Gap Warehouse label for outlets, "in styles, colors, fabrics and finishes made especially for Gap Warehouse," the company literature says. The merchandise found in the chain's regular stores is nonexistent in the outlets, a company representative says. A regular Gap pocket T costs $10.50; a Warehouse T of the same design is $7.
"Your objective determines how you price your goods and run your business," Engler says. "We have more stuff coming down the pipeline, and we want to move it through quickly. The people selling regular goods don't need to mark it down and push it through."
