COVID-19: What should clothes retailers do with their mountains of unsold stock?
A mountain of apparel stock has been piling up in stores, distribution centers, warehouses and even shipping containers during months of COVID-19 lockdowns. As retailers reopen around the world, they have to work out how to get rid of it.
Their main options? Keep it in storage, hold a sale, offload it to “off-price” retailers like TJ Maxx which sell branded goods at deep discounts, or move it to online resale sites.
None are ideal, and all are damage-limitation.
Real estate company Knight Frank told Reuters it had fielded inquiries for excess stock for over 6 million square feet (557,500 square meters) of short-term let warehouse space in Britain since the pandemic took hold there in March.
Yet storage is only a realistic option for evergreen “basics” that are not tied to one particular year and could be sold at a later date should consumer demand bounce back - items like underwear, t-shirts, chinos and classic sneaker styles.
Apparel chains including British high-street retailer Next and German sportswear brand Adidas said they had stashed away unsold basics, with the aim to offer them to shoppers next year instead.
But stowing away piles of inventory is risky.