A friend of mine who wants to remain anonymous (I get quite a few of those) sent me an email the other day and had an interesting point to make about gross margin for brands who owned retail stores.
When a brand opens retail stores they do it at least in part because they expect to capture the margin that previously went to the retailers they sold product to. We all understand that. Just to pick some numbers, let’s say that brand earns a 35% gross margin when they sell their product to retailers they don’t own. And let’s say it’s 65% when they are selling the product in their own retail stores.