Express Fashion was a clothing retail shop I used to frequent a lot however recently, about a year and a half ago I noticed something, I noticed that they had significantly reduced the quality of their fabric, yet maintained and even increased their prices. On the rare occasion when I visit the mall, I routinely inspect the clothing at some clothing stores I visit and on this recent visit to an Express store I was looking for dress pants. Express has always had top quality dress pants and they had a certain style called the ‘producer’, which was 100% wool.
The wool pants had a proper form and fit, were light, durable, and cool in temperature due to its wool fabric. They were properly priced as well at $110 and above and this was acceptable due to the quality and care of the fabric. Though on my most recent I noticed, even before inspection, but from vision that the fabric of the pants in the store hung differently and the fabric itself seemed oddly off. I approached closer and took a look at the make up and instead of wool these pants were now composed of polyester and 20% cotton.
This was OK, what was unacceptable was the considerable markup, not only were these lower quality pants selling at the same price point as the previous higher quality fabric, but was actually given a higher price point. These ‘producer’ pants was retailed at $150 dollars. I asked one of the store reps what had happened to the previous fabric that was used on these and other line of pants and I was informed they had stopped using higher quality fabric.
Higher marketing budget, lower quality clothes
Express Fashion has recently increased its marketing, they rebuilt their website, implemented email marketing, ad marketing and various tracking technologies that make sure their ads followed me wherever I went. I have no doubt that this is increasing their sales, although the slate of coupons I receive in my email offering 33%, 50%, 70% off not only betray the true worth of this new product, moreso it points to the fact that this increased volume generates lower margins overall.
Express Fashion has optimized its marketing while lowering the quality of their product and it follows that the increased volume they get may offset those higher margin customers who stop shopping there. Is this a good business model, is it creating value, and is it sustainable? The answer to all this may be yes, but I’m not privy to their financials, although from my vantage point, it seems to be in poor taste. While the valuation of the fashion house may have increased, the value to me, a high margin customer has fallen.
Losing face and losing value
This brings me to the value talk. Now for me the value in Express has fallen considerably, though my question with this is whether a higher marketing budget can makeup for a poor product. Are the new customers spurred on by this higher marketing budget finding any value in Express or are they spurred to shop there due to the 75% discount coupons. I guess only time will tell.