Clothing retailers to decide on stock after lockdown

DURBAN – Due to the various Covid-19 lockdown regulations around the world, many clothing retailers are undecided on what they should do with the old stock that had been delivered to stores before lockdown.

Some clothing brands, like Adidas and Gap, have decided to store their unsold stock in warehouses to sell them next year instead. This solution is known as “pack and hold”.

During Gap’s company’s earnings call on Thursday, Gap‘s chief financial officer Katrina O’Connell, said: “We implemented a flexible pack-and-hold inventory approach, whereby summer and fall inventory that we will be unable to sell due to store closures and potentially lower demand will be held until next year’s selling season.”

“This is not like wine that gets better with age. Your inventory gets worse,” said Emanuel Chirico, chief executive of PVH Corp, which owns Calvin Klein and Tommy Hilfiger, on a recent earnings call.

Most fashion retailers are still deciding whether or not they should put their old stock back on the shelves at major discounted rates for in store and online buyers. This would help them to be able to ease the stock load at their warehouses. Whichever decision the clothing retailers make, it is unlikely that these clothing retailers would be able to make a quick financial recovery.

 

 

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