Fashion brands across the globe are in a fix with most stores still closed brands are clueless about their plans to dispose unsold inventories. Many brands plan to either burn or throw away some of their stock to protect their image and price integrity. However, as France has banned bonfires of all consumer goods, these brands would have to find new ways to get rid of excess stock.
They can follow the example of Burberry which recently announced a new strategy for its S/S’20 overstock. Burberry plans to sell its remaining stock at discounted outlets or in staff sales or donate it to charities or recycling organizations
Smaller brands take to flash sales
While bigger brands can sell their stock at discount stores, smaller designers have to organize early flash sales. London-based designer Rejina Pyo organized one such sale in April where she offered a 20 per cent discount on a pair of strappy sandals, 30 per cent off on a tiger-print skirt and 40 per cent off on a woven bucket bag for 24 hours.
Similarly, designer Petar Petrov held a private shopping night in his Vienna studio in June. Left with €1 million of merchandise from cancelled orders, the designer offered a 20 per cent discount on all products and sold 150 pieces. He later organized another sale in Munich where he offered 40 per cent discounts.
Altering discounting strategies
In order to boost sales, retailers are resorting to drastic discounts like Saks sold a flowery Rosie Assoulin blouse at $334 even though its original retail price was $1,395. Similarly, Net-a-Porter offered 70 per cent discount on tops by Ganni and denim bombers by Stella McCartney. Brands are also altering their discounting strategies for resale sites such as Vestiaire Collective without detracting from the full-price merchandise. Harrods set up an outlet in Westfield shopping centre in London while Stockholm-based sneaker brand CQP established a separate sale site titled CQP Archive in June, with more than 30 styles from current and previous seasons.
Katie Holland, Founder, Showcase plans to wind up her collections in a end-of-year sample sale. This sale event will be bigger than ones organized earlier and more designers will be attending it. MadaLuxe Group, the New York-based middleman company that buys out-of-season inventory from brands and discreetly filters them through to discount stores, has also increased business projections by 25 per cent. The company buys packages from brands spanning between $1 million to $400 million. The company offers each brand a proposal to shift stock across territories, holding it within its own warehouses until it is sold on to discount stores.
Taking the charity route
Brands that aren’t hard-pressed for cash are donating their leftover stock to charity organizations. Smilovic donated more than 900 dresses to frontline workers in April while Italian designer Brunello Cucinelli plans to gift clothing worth €30 million to various charities globally. Fionnula Shannon, Executive Director, Dress for Success Charity believes every organization has a corporate and social responsibility and brands will not able to claw back all profit however they try to sell their surplus stock.