I am a huge fan of outlet stores. I pretty much never buy anything at full price, anywhere; most of my daughter's clothes (and my own) are clearance rack, thrift store, garage sale, or outlet store finds. Outlet stores are great because they are based around a brand name, so you and your kids can still wear the same great brand names and styles for significantly less. Outlet stores sell overstock, and sometimes stock with minor flaws, but these flaws are usually unnoticeable or easily fixed (such as some stitching out of place, mislabeled pieces, etc).
Where we live in the Twin Cities, we're fortunate to have three outlet store malls nearby. North Branch Tanger Outlets, Albertville Premium Outlets, and Medford Outlets are all close enough to make a trip (provided we need to do a lot of clothes or gift shopping). Albertville is even on the way to my in-laws' house, so it's easy to have an excuse to go there - plus they're one of the biggest outlet mall areas I know of. There are a lot of child-friendly stores there, too, which makes it great for those with kids who just keep growing out of their clothes. Since I have a toddler who is growing like a weed, but I want her to look nice, outlet stores are a great way to achieve that. Plus, the merchandise wears just as well as that sold in regular stores, so when she does outgrow it, I can pass it on down the line to the next person in the hand-me-down train, or I can re-sell it at a garage sale, on Craigslist, or at a used baby store.
One store they have that I like to visit is the Gap Outlet. I like Gap's clothes better than a lot of other brand names - the kids' clothes are cute without trying to tart up little girls or put them in trends that are way older than they are. Right now, Gap Outlet is offering some special savings through the Gap Outlet Twitter Moms page (an extra 10% off). They are also running a blogging program through Twitter Moms for an opportunity to get a gift card.
There are 200 stores in the US and Canada. Find your closest store here.
Gap Outlet - Semi-Annual Baby SaleTwitterMoms Exclusive: Gap Outlet Semi-Annual Baby Sale Savings!
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