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I work in a charity shop and we sell coats for ladies. Should the sign read "Ladies' Coats" or "Ladies Coats"? I argue for the apostrophe but some of my friends argue that as the coats do not belong to the ladies yet that there shouldn't be an apostrophe.

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Your friend is correct, before they are purchased the coats belong to the business, and not to the ladies who will be purchasing them to add to their wardrobe.

So the sign should read

Ladies Coats

For example:

See this wording from a high street retailer:

Ladies Coats

enter image description here

Gary
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    Sorry, but that is not true! Strictly speaking, the apostrophe should be used because the coats are of a style intended for women. Whether they are currently in the possession of ladies is irrelevant. However, there is a tendency nowadays to leave out final apostrophes for the sake of neatness, which is what the website has done. – Kate Bunting Dec 04 '17 at 10:58