• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

3

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

3

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Amazon

Amazon Steps Up Fashion Challenge to Retailers by Charging Full Price

Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
April 7, 2016, 3:24 PM ET
Company Signs
Amazon corporate office building in Sunnyvale, CaliforniaPhotograph by Lisa Werner — Moment Editorial via Getty Images
Add Fortune on Google for similar content.

It might seem counterintuitive that higher prices are the key to Amazon.com (AMZN) taking its fashion business to the next level.

But that’s exactly what the online store is doing to woo labels that for years thought Amazon was too down market and whose low prices would tarnish its brand.

The Wall Street Journal on Thursday reported that many top brands, including Nicole Miller, PVH’s (PVH) Calvin Klein, Kate Spade (KATE), Lacoste, and others, are now selling directly to Amazon.

In what is a tough time for chains like Macy’s (M), Dillard’s (DDS), and Kohl’s (KSS), many brands want to reduce their reliance on struggling department stores. What’s more, Amazon has been ramping up the selection offered by its own brands, using its size and scale to build up a robust fashion supply chain. Amazon recently launched seven of its own brands, including Franklin & Freeman men’s shoes and Society New York women’s dresses. And investment bank Cowen & Co. estimates that Amazon sells 343,000 different kinds of items (this includes different size and color combinations of a given item) in leading brands, compared to 85,000 apiece for Macy’s and Nordstrom.

Last year, Cowen estimated that Amazon, which is a relative latecomer to the world of fashion and apparel, would sell $27.8 billion worth of apparel in the U.S. in 2017, surpassing Macy’s as the No. 1 seller of clothes in the United States. (That’s up from an estimated $16.34 billion last year, according to Cowen.)

“The full-priced brands recognize that Amazon now is going all in with its own private brands and really trying to take over the apparel stage,” David Bassuk, managing director at AlixPartners and co-head of the firm’s retail practice, told Fortune.

Meanwhile, major clothing retailers are struggling. Macy’s sales fell 3.7% last year, while Kohl’s rose only modestly. What’s more, apparel is still an under-penetrated part of online shopping, meaning there is plenty of opportunity for Amazon to woo large fashion brands, despite their long held fear that selling to the online retail giant would undercut the chains that give those brands nice in-store presentation and look to cultivate those brands.

But many are starting to overcome such worries. As the Journal points out, long time Amazon holdout Ralph Lauren (RL) has started to sell some shoes directly on the site. (It’s easy to see why Ralph Lauren might want to branch out a bit: Macy’s accounts for about half of its North American wholesale business, and that retailer is contending with declining mall traffic.)

Department stores have been fighting back. As J.C. Penney CEO Marvin Ellison told Fortune in a recent cover story, the retailer is looking to make better use of its big private brands, which include St. John’s Bay and Arizona, to offer shoppers exclusive items. And Kohl’s last month relaunched its billion-dollar Sonoma apparel and home goods brand. (At both of those chains, private and exclusive merchandise generates about half of revenue.)

And higher end department stores like Nordstrom (JWN) and Neiman Marcus offer free returns, something that would squeeze Amazon. Fashion shoppers typically order an item in two or three sizes, meaning such retailers have learned to deal with a deluge of returns. Macy’s CEO Terry Lundgren last month predicted this would be create havoc for Amazon, telling analysts, “They’re going to have an interesting challenge when they start getting all those returns coming back online.”

All of these incumbent chains have touted their fleets of hundreds of stores equipped to handle online returns as a big edge over Amazon.

Still, many have predicted that Amazon would never cut it in the fashion world. Indeed, it has been one of the toughest retail nuts to crack for the online giant. But many chains have also learned the hard way not to underestimate Amazon.

“It’s not going anywhere,” AlixPartners’ Bassuk said of Amazon’s threat.

About the Author
Phil Wahba
By Phil WahbaSenior Writer
LinkedIn iconTwitter icon

Phil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.

See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

Mark Zandi, Moody's chief economist.
EconomyU.S. economy
‘It’s fair to ask whether it was worth it’: The Iran War has cost Americans $1,000 per household—and that’s a conservative estimate, Mark Zandi says
By Tristan BoveJuly 1, 2026
3 hours ago
Melania Trump NFT earnings surge 28x in 2025 as First Lady rakes in nearly $17 million in total earnings, filing shows
PoliticsDonald Trump
Melania Trump NFT earnings surge 28x in 2025 as First Lady rakes in nearly $17 million in total earnings, filing shows
By Mia OsmonbekovJuly 1, 2026
3 hours ago
Donald Trump sits at his desk in the Oval Office, smiling and with his hands folded in front of him.
PoliticsDonald Trump
Trump got a $78K pension from the Screen Actors Guild in 2025 because he appeared in Home Alone 2 in 1992
By Sasha RogelbergJuly 1, 2026
4 hours ago
How foodservice giant Sodexo is embracing AI and robotics to reshape the kitchen
NewslettersCIO Intelligence
How foodservice giant Sodexo is embracing AI and robotics to reshape the kitchen
By John KellJuly 1, 2026
4 hours ago
Anthropic CEO Dario Amodei
AIAnthropic
Anthropic’s AI models are back online after a two-week government standoff—settling the company and administration into a fragile truce
By Tristan BoveJuly 1, 2026
4 hours ago
U.S. Polo Assn. CEO J. Michael Prince
SuccessThe Promotion Playbook
U.S. Polo Assn. CEO was told he wasn’t right for a promotion—so he ‘outworked’ anyone else who wanted the job for 6 months straight
By Orianna Rosa RoyleJuly 1, 2026
6 hours ago

Most Popular

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
7 days ago
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
Big Tech
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
By Marco Quiroz-GutierrezJuly 1, 2026
14 hours ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
4 days ago
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
Success
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
By Sydney LakeJune 29, 2026
2 days ago
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
Newsletters
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
By Diane BradyJuly 1, 2026
12 hours ago
The U.S. Army is opening military bases to private billions — here's why that changes everything for the next 250 years
Commentary
The U.S. Army is opening military bases to private billions — here's why that changes everything for the next 250 years
By Marc AndersenJune 30, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.