The right fit
Taking stock of fashion’s $210bn inventory problem
Fashion retailers are faced with a dilemma: to keep up with the demands of 'fast fashion' they need rapid stock turnover. But what do they do with the surplus?
What does a clothing retailer do with lines that don’t sell? If it’s international fast-fashion house H&M, some of that stock gets incinerated. Having found itself saddled with $4.4bn in unsold inventory, the Sweden-based retailer has few options when it comes to disposing of it. A similar story may be told about luxury goods maker Burberry, which had a policy of burning its unsold merchandise. The company reversed its position in September, after a public backlash to the news that it had destroyed £28.6m worth of stock in 2017 to protect its brand.
H&M and Burberry are not alone. Many other retailers — Nike and Chanel among them — have been called out for destroying their stock. But what are companies to do with their surplus inventory? Some retail chains and consumer brands sell unsold goods on to third-party stores, such as Century 21 in New York. But for those looking to preserve an air of exclusivity around their goods, this might not be a satisfactory solution. It’s a si...