Amazon’s apparel business could grow to as much as $85 billion in sales by 2020 Inc. may already be the largest apparel retailer and could still grow to sales between $45 billion and $85 billion by fiscal 2020, according to Instinet analysts.

Instinet analysts led by Simeon Siegel estimate overall apparel and accessories sales at above $1 trillion with “above average” online penetration and “leading gross margin” compared with other categories.

“We believe Amazon AMZN, +0.19%   has the largest [total available market] TAM (ever), doesn’t carry socio-economic retailing stigmas, can stock a limitless number of goods on its virtual shelf and knows customers better than they do,” Instinet wrote. “Amazon’s path to book dominance provides a potential road map for apparel success, with its fiscal 2007 media progress sharing similarities to its fiscal 2017 apparel achievements,” the note said.

Instinet says Wal-Mart Stores Inc.’s WMT, -0.24%   apparel sales are about 8% of total U.S. sales, and about 10.5% of U.S. nongrocery sales. Target Corp.’sTGT, +0.46%   apparel sales amount to about 20% of net sales. Amazon’s fiscal 2016 global apparel gross merchandise volume was in the 10% to 20% range, or $18 billion to $36 billion, “enveloping Walmart US and Macy’s apparel sales of $25 billion and $22 billion.”

Right now, Amazon is “best with basics,” but is trying a number of strategies to see what sticks, including a push into private labels, which analysts estimate could drive $1.6 billion in gross profit, and Prime Wardrobe, which lets shoppers try on clothes before committing to the purchase. And Amazon has, increasingly, a universal appeal, Instinet said.

Amazon is also becoming more important to brands, with powerhouse athletic company Nike Inc. NKE, +1.16%   entering into a partnership with the e-commerce giant.

“The fact that Nike, one of the most valuable brands in the world, was the most recent to announce a partnership, shows the want, need or somewhere in between to see through Amazon, as the sneaker behemoth implicitly acknowledges they’d be better off being a part of the Amazon machine than simply watching others sell their goods for them in an uncontrolled manner,” the note said.

Instinet rates Amazon shares buy with a $1,360 price target.

For 2017, Wells Fargo analysts estimate that Amazon’s gross merchandise volume in the U.S. apparel/footwear category will approach $18.5 billion, more than T.J. Maxx parent TJX Cos. TJX, +0.05%   and Macy’s Inc. M, +2.06%  , making Amazon the number two player in the market. Analysts also estimate that Amazon accounted for 35% of retail growth in the third quarter.

While analysts note that many brands, including Nike, are turning to direct-to-consumer channels in order to compete while maintaining brand equity, what Amazon has to offer is compelling.

“As mall traffic continues to decline and department stores are falling out of favor, vendors need to look elsewhere for growth and Amazon is the most compelling and obvious vehicle for this,” Wells Fargo wrote.

Wells Fargo rates Amazon shares outperform with a $1,525 price target.

Amazon shares are up 53.7% for the year so far while the S&P 500 indexSPX, +0.55%   is up 17.4% for the period.

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