Fashion after lockdown: What happened to all that surplus stock?

What became of all the trend-focused pieces in boutiques and department stores that could not sell during lockdown?

Fashionable woman wearing protective face mask and shopping during pandemic

The fashion industry has been pulled apart at the seams by the Covid-19 crisis and left in shreds. 

However, some might argue it was hanging by a thread long before the crisis hit, with the pandemic just ripping open the systemic problems that are weaved into its fabric. Issues that dogged the industry included endless consumption, multiple drops, and the churning of product.

While an outdated sale cycle that was confusing to customers, saw winter coats hitting shops in the blistering summer heat, and bikinis filling the rails in November, all pointed to a system that was flawed and needed a dramatic change.

Designers have proposed a resetting and restructuring of the seasons, as well as rethinking the fashion calendar, production, and retailing systems. 

"The fashion industry is reflecting on the multi-season/drops aspect. The pace and frequency of collections are frantic, many designers are suffering burnout and moving from brand to brand with the frequency akin to that of English football managers," says fashion retail consultant Eddie Shanahan.

Michael Kors was one such designer that announced he would present and produce two collections a year. Scheduling them to arrive in store incrementally and more closely reflecting how customers live and shop and create a more streamlined approach on the sales floor. With Kors, explaining: "We have all had time to reflect and analyse things, and I think many agree that it is time for a new approach for a new era." 

The British Fashion Council, and The Council of Fashion Designers of America, Giorgio Armani, Dries Van Noten, Gucci, and YSL are all reshaping the show schedule and delivery times too.

That need for change is undoubtedly felt by some of the heavyweight commenters of the industry too, American Vogue editor Dame Anna Wintour believes peoples values have shifted, stating: 

I think it's an opportunity for all of us to look at our industry and to look at our lives, and to rethink our values, and to think about the waste, and the amount of money, and consumption, and excess that we have all indulged in and how we need to rethink what this industry stands for.

With a consumer shift and growing move towards a waste-conscious mindset, the crisis has only highlighted the massive waste and environmental impact the fashion industry has.

Unfortunately, the fashion industry had always overproduced, relying on the notion that it is better to have more of it than none of it at all. A problem that was nothing new but now escalated exponentially due to lockdown.

As bricks-and-mortar stores shuttered to a close in March, mountains of clothes piled up in stores, distributions centres, and warehouses. It emerged that British retailer M&S had taken a £145m hit on unsold clothes since the crisis, and it is clothing, and home sales plunged 75% for the six weeks up until May compared to a year earlier. Not only that, but some high-street retailers canceled, deferred, or looked for discounts on orders from suppliers, leaving garment workers in factories across the world on the poverty line. While other retailers could not get access to their multiple drop orders, leaving them in limbo, as the industry slowly grounded to a halt.

E-commerce saw a boost through lockdown, as online shopping tried to fill the gap. According to the fashion director of Brown Thomas Shelly Corkery, they were very fortunate to have the website with it accelerating to their number one door throughout the closures. "Like all retailers in the fashion business, Brown Thomas had to think strategically and be very flexible to react fast. We developed over 25 new shopping channels, including the launch of a virtual personal shopping service, which became such a valuable selling tool for us," she says. 

These next-level modes of engagement are integral to accelerate demand online, particularly through social channels, and maybe due to lack of a more personalised approach, online sales were not enough to sustain losses or shift all stock across the high-street. With Zara's parent company Inditex — which owns brands Bershka, Massimo Dutti, and Pull & Bear — reporting a net sale drop of €3.3bn for the first quarter, even despite a 50% increase in trade online.

15th June 2020. Queue at Zara at MahonPoint shopping centre, Cork Picture: Eddie O'Hare

Consumer confidence, or spending for that matter, has still not returned fully, as many people still grapple with job losses, uncertainty over PUP payments, and fears over a second lockdown.

Coupled with the cancellation of events, like festivals, weddings, and the reliance on staycations rather than foreign holidays has resulted in a decreased appetite for discretionary purchases.

With blows to supply and demand, and a hangover of lockdown still being felt by retailers, it has thrown up questions about what will happen to the build-up of stock on shelves.

Designer brands typically work on much lower stock levels than high-street retailers. Hence, their waste is usually more moderate, and this certainly was the case for Costume boutique in Dublin, who have not had to deal with surplus stock. Instead, thanks to a secure relationship with suppliers, they found a remedy. 

Anne Tucker says: "Of our suppliers have been able to offer us the ability to swap out slow movers for items that we may have sold out off. Trends did change, and there was a real move to more WFH wear and casual luxury, we were able to swap out some things to suit this midseason."

For others, though, to maintain some semblance of an income, discounting stock, of course, is one short-term intervention for those wanting to shift inventory. Which is good news for bargain- hunters. This, however, has to be balanced, to attract customers to a great deal while still ensuring a margin for the retailer and avoiding potential brand-damaging discount. As with all retailers slashing prices, how low do you go to standout, and when do you stop?

Excess inventory is not only a profit/loss issue; it is also a space problem. Renting a warehouse to house excess stock is not a reality for many retailers. Although, according to Reuters, retail estate company Knight Frank had inquires for short-term let warehouse space of over 6m sq ft to house excess stock since the pandemic took hold. In a report by Drapers, due to fast and steep drop in sales, retailer Next was left with more stock than anticipated, therefore has started to use third-party storage facilities and hold stock in source countries. However, with each unsold piece sitting in storage, it represents money lost and its value diminishes. And with the trend-nature of fashion, storage can only be utilised for more seasonless basics that can be repurposed later in the year.

Previously, there were certain companies that would destroy inventory, either by burning, shredding, or sending to landfill. However, in an era where sustainability is at the forefront of fashion, these processes can no longer be seen to be carried out by retailers. If they cannot be sold at sale prices or stored, the remaining options include selling to market traders, off-price outlet stores, and charity shops. Another solution for future-proofing is to plan to buy less to avoid a repeat of a build-up of unsold stock or avoid needing to hold more sales.

Even if a retailer weathers the surplus stock storm, certain other hurdles are facing them as they navigate the new season, which is fast approaching. Retailers will also need to infuse value, gain trust, and obtain enthusiasm of customers to convince them to spend on full price items.

Speed and adaptability are essential in dealing with stock levels, and customer changes, as Corkey says: "Facing a pandemic the world has never seen before, we all have to constantly review our business and be fast, flexible, and commercially minded at all times."

The queue outside Brown Thomas, Patrick Street, Cork as it re-opened to the public. Picture: Dan Linehan

With customer mindsets shifting, orders needed to be adapted to the new normal, but that is not always left up to the retailer's decision. Tucker admits that Costume was left with cancelled and delayed orders for new season stock. 

She says: "One of our labels had to cancel the whole order unfortunately as their factory was hit hard, another label has decided that moving forward they would use previously cut styles in fabrics that have already been printed. The feeling is that all businesses are relying on what their strengths are and holding tight on that for this season."

Shanahan agrees that the autumn season will see some repeats of brands big hitters as brands try to work around the ramifications and restrictions. 

He says: As many supply chains were disrupted, even major brands will feature similar styles in their autumn collections as new prototyping, sampling, selling processes cannot happen in time to produce new collections. While fabrics may change, the difference between seasons will not be as pronounced as usual.

However, this unmarked dissimilarity between seasons can ultimately be a good thing. Shanahan believes it is a period of calmer commerce, where quality and longevity rise to the top. Corkey admits that Brown Thomas' contemporary business is very strong, as are the luxury brands, reinforcing Shanahan's point about first-rate fashion coming to the fore. 

"Designers will need to focus on offering investment dressing, harking back to concepts like the one that originally made Donna Karan famous — seven easy pieces — and women appreciative of a wardrobe that worked in line with their real lives," says Shanahan. 

With this move away from such a strong focus on trends and more about timeless pieces, instilling a buying less, buying better mantra, it can only offer up the potential for a less wasteful fashion future.