"Unsold Clothing Buries Retailers — WSJ."

April 30, 2020 Business Consumers Money

…. Clothing retailers are sitting on tens of billions of dollars of unsold merchandise, and the usual methods for clearing it out aren’t working while the coronavirus keeps most U.S. stores closed.

Retailers are discounting heavily on their websites, but consumers aren’t rushing to buy spring clothes. Off-price chains like T.J. Maxx that would normally snap up the excess are also closed. Liquidators, often a last resort, are already saddled with goods from bankrupt retailers that have halted their going-out-of-business sales.

“This is not like wine that gets better with age,” Manny Chirico, the chief executive of Calvin Klein and Tommy Hilfiger parent PVH Corp., said on a conference call earlier this month. “Your inventory gets worse.”

Some companies are packing away goods with the intent of selling them next year, a process known as hoteling. But this can be costly and doesn’t work for fashion items that go out of style, executives say.

Saks Fifth Avenue ran a one-day flash sale last week with spring dresses at up to 70% off. Nordstrom Inc. is offering up to 40% off certain styles. J.Crew Group Inc. is offering up to 60% off spring styles, and the Gap brand is selling everything for 60% off.

“It’s Black Friday in April,” said Prashant Agrawal, chief executive of Impact Analytics, which tracked online prices in April for 400 items and compared them with prices on the day after Thanksgiving, when the holiday season kicks off with big promotions. Two-thirds of the items, mostly apparel but also shoes and jewelry, were selling at Black Friday prices or below, Mr. Agrawal said.

READ more at: https://www.morningstar.com/news/dow-jones/202004211176/unsold-clothing-buries-retailers-wsj

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