Amazon Makes Strategic Cuts to Private-Label Brands to Address Antitrust Concerns and Profitability

Amazon.Com, Inc AMZN significantly reduces its private-label operation to address antitrust scrutiny and enhance profitability. 

Over the past year, the company has decided to eliminate 27 out of its 30 clothing brands, including Lark & Ro, Daily Ritual, and Goodthreads, the Wall Street Journal reports. 

Also Read: Amazon Restructures Grocery Business To Win Market Share From Walmart

The company is gradually phasing out the brands, selling off the remaining inventory. This strategic move will leave Amazon's clothing division with only three remaining house-label brands: Amazon Essentials, Amazon Collection, and Amazon Aware.

Besides its clothing brands, Amazon is discontinuing private-label furniture, phasing out the Rivet and Stone & Beam brands once the stock depletes. 

Amazon Basics, known for its wide range of home goods and tech accessories, will remain a focal point for the company. 

The company's vice president of Amazon Private Brands, Matt Taddy, highlighted that Amazon's decisions reflect customer preferences and a desire to offer high-quality products with great value.

Amazon's use of platform data to develop products that competed with third-party sellers raised antitrust concerns and led to increased regulatory scrutiny.

Amazon's private-label business has been a focal point of regulatory investigations, with the Federal Trade Commission (FTC) preparing an antitrust lawsuit against the company. 

Amazon also faced scrutiny from the SEC, U.S. Equal Employment Opportunity Commission, and the European Commission.

Amazon has stated that private brands make up only 1% of total retail sales.

Price Action: AMZN shares traded higher by 1.76% at $140.23 on the last check Thursday.

Photo via Phillip Pessar via Flickr

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.