- As retailers reopen around the world, they have to figure out what to do with mounting inventory.
- Options include keeping it in storage, hold sales or offload it to discount retailers.
- Storage is an option for evergreen basics but it has its risks.
- Some retailers may hold off major decisions as they gauge their performance once customers return.
Forget fast or slow fashion, for now, it's ground to a halt that has left a mountain of stock pilling up in stores, 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 their stock. The main options are to keep it in storage, hold sales or offload to discount retailers. They could also move it to online retail sites but none are ideal and all options have damage limitations.
Estate agency, Knight Frank told Reuters it had fielded inquiries for excess stock for over six million square feet (more than 550 000 square meters) of short time warehouse space in Britain.
Storage is an option for evergreen basics that are not tied to one particular year. Underwear, t-shirts, chinos and classic shoe styles have been stored until demand bounces back. Chains including, British retailer Next and German sportswear brand Adidas, have stashed away unsold basics.
But stowing away piles of inventory is risky. One fashion executive says, "This is not like wine, which gets better with age, your inventory gets worse."
UK-based Parker Lane Group helps companies manage excess stock and advises selling off-price. It says it's currently processing over double its usual volume of up to one and a half million items per month.
In the U.S. clothing sales fell at least 90 percent in April from the same month in 2019. And British sales sank by 50 percent compared with an already squeezed march.
Retailers hope that an easing of measures sees shoppers return to stores, eager to unleash pent up demand. But there's no guarantee sales will rebound anytime soon.
Many stores are expected to pursue a combination of holding sales as well as selling stock to off-price retailers.
Some may hold off on any major decisions so they can gauge their performance as customers gradually return.
Complied by Phelokazi Mbude
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