Is Off-Price A Safer Growth Channel For Brands?

Taking opposite approaches to off-price selling, Carter’s is looking to drive growth while Puma is looking to reduce its dependence on the channel. 

Speaking at the ICR Conference 2026 in mid-January, Douglas Palladini — CEO at Carter’s, whose wholesale brands include its namesake brand, OshKosh B’gosh and Little Planet — said department stores are “great lifelong partners of ours, but they’re not opening doors anymore.”

Growth will come from mass, where Carter’s already makes private labels for Walmart, Target, and Amazon, and off-pricers where the “Gen-Z mom” is increasingly shopping amid inflationary pressures. Palladini remarked, “What’s going on in off-price has been remarkable. The T.J. Maxx’s, the Burlington’s of the world. It’s been incredible to see.”

Richard Westenberger, Carter’s CFO and COO, added, “The off-price or the promo channel represents a considerable opportunity for us. That’s where she’s shopping today. That’s where my family is going to shop. And so we want to make sure we have a presence there.”

At Puma, however, officials have said the activewear brand needs to “consider the off-price channel as more of an opportunistic channel and less of a growth channel.”

Puma’s wholesale sales in the recent third quarter fell 15.4% due (in large part) to efforts to reduce exposure to off-pricers in the U.S. Arthur Hoeld, a former Adidas executive joined Puma in July 2025, said on Puma’s third-quarter analyst call that three of the brand’s largest global customers are considered off-pricers, or where “off season business is sold in a very wide distribution and in a not very brand enhancing manner.”

Freundt added, “We do believe that with a better brand positioning, we have room there for higher price points, but also for being way less promotional driven.”

Prominent Brands Moving Away From Off-Price Methods

Several other brands have also publicly indicated in recent years they’re de-emphasizing off-price channel sales in order to improve brand perception and boost margins.

Both Levi’s and Polo Ralph Lauren in 2019 revealed plans to reduce dependence on off-pricers, as well as promotionally driven department stores, and have recently stated that the increased emphasis on brand elevation and full-price selling has helped improve results. Nike, The North Face, Hugo Boss, Under Armour, Dr. Martens, Guess, and Steve Madden are among other brands that have stressed commitments in recent years to reduce promotional selling and sales in off-price channels.

Despite This, Off-Price Remains Lucrative

Any aversion to off-price comes as the channel has been steadily delivered above-average growth amid aggressive expansion. Since the start of 2000 through the third quarter of 2025:

• TJX Cos.’s U.S. store count across banners (TJ Maxx, Marshalls, HomeGoods, Sierra, HomeSense) increased 17% to 3763.
• Ross Stores’ store count across its Ross Dress for Less and dd’s DISCOUNTS banners grew 26% to 2273.
• Burlington Stores’ store count jumped 67% to 1,211.
• Nordstrom Rack’s store count expanded 21% to about 300 stores.

TJX, Ross Stores, and Burlington Stores have also indicated on recent quarterly analyst calls that healthy buying opportunities continue. Ernie Herrman, TJX’s CEO, said on TJX’s third quarter call ahead of holiday selling: “Availability of quality branded merchandise has been exceptional, and we are in an excellent position to flow a fresh assortment of goods to our stores and online.”