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Great mountains of the world: Everest, Kilimanjaro, Inventory. As store closures extend into May, retailers’ unsold goods are piling up in warehouses.
- Brands with too much inventory to handle range from IG-famous indie brands like Ganni to fast fashion behemoths like Primark. The latter has around 1.6 billion British pounds of unsold stock.
- It could be 18 months until retailers clean out their supply bottlenecks, the Telegraph reports.
Decisions, decisions
Every item sitting in a warehouse is a production cost retailers won’t get back. So retailers should consider all options to turn lemons into liquidity.
- Discounts. 70% off dilutes brand value but accelerates customer activity. Apparel items in the U.S. are selling at Black Friday prices, the WSJ notes.
- Donations. Doing good now could mean a tax benefit and reputation boost later.
- Displacement. Off-price giants like TJ Maxx aren’t accepting new inventory now, but retailers with high-end apparel to offload can send it to smaller international outlets.
Last resort: Brands can hold their inventory until 2021...but this year’s trends will feel stale by next. “This is not like wine that gets better with age,” PVH CEO Manny Chirico said on a conference call. “Your inventory gets worse.”