Fashion retailers may have to write-off £15bn worth of spring and summer stock

Fashion retailers may have to write-off £15bn worth of spring and summer stock
Sales of non-food items have fallen by 70 per cent since the lockdown, according to new research.
// £18bn worth of spring/summer stock is building up in warehouses as shoppers stay at home
// Fashion retailers make 1/3 of annual sales during March-June but lockdown will impact demand for new clothing
// Retailers now faced with quandry of what to do with excess stock

Unprecedented volumes of clothing are building up in warehouses as fashion retailers are unable to sell their spring and summer stock.

The majority of physical shops in the UK remain closed under the government’s current lockdown measures, with sales of non-food items down by 70 per cent according to research by Retail Economics and Alvarez & Marsal reported by the Times.

READ MORE: Primark workers face further salary cuts amid Covid-19 outbreak

The study found that more than 50 per cent of non-food retailers in the UK will likely run out of cash in the next six months, with all major non-food retailers operating in negative cash flow at present.

“Spring/summer will be a write-off for most retailers and excess levels of stock will flood the market in June and July, leading to significant discounting and margin erosion,” Erin Brookes of Alvarez & Marsal told the Times.

“Given that various clothing retailers were plagued with underlying issues prior to the pandemic, administrations will be inevitable.”

According to the Times, the months of March to June account for around a third of the fashion market’s £55 billion yearly sales, which means £18 billion of those sales are now at risk.

While some stock may be cleared via discounting, fashion retailers who focus on trend-led products are likely to suffer from excess inventory.

Primark, Arcadia and Urban Outfitters have cancelled orders as they attempt to mitigate the impact of the coronavirus pandemic on sales.

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