Why the rag trade is a risky trade
Clothing retail offers high rewards when everything goes right, but the odds are stacked against it in 2023
23 February 2023 - 08:00
Walking from one end of your local regional mall to the other, you’ll be enveloped by clothing shops. People care deeply about what they wear, regardless of their spending power, and a plethora of businesses compete to satisfy their needs at different price points.
Fashion is arguably the riskiest retail format, combining expensive shop rentals and long working-capital cycles with the whims of consumerism. For investors seduced by juicy gross margins at these retailers, understanding the risks is important...
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