With warm weather expected at the start of the fourth quarter, stores offering winter style and apparel may find themselves stocked with inventory
An unseasonably warm autumn from the US to Europe is squeezing sales of sweaters and coats as the all-important holiday season approaches, managers at major retailers such as H&M say. Some stores are already cutting prices to avoid piles of unsold inventory, Reuters reports.
Over the past year, fashion retailers have been scrambling to part with excess inventory built up as consumer demand shifted toward essentials from non-core items such as clothing.
But with warm weather expected at the start of the fourth quarter, stores offering winter styles and apparel could find themselves stocked with late-season inventory, according to weather tracking company Weather Trends International.
Related articles
H&M’s more luxurious brand, Cos, has started offering a 20% discount online and in stores on knitwear and outerwear. H&M Chief Executive Helena Helmerson told Reuters that consumers were delaying purchases of “heavy” fall clothes amid warmer-than-usual weather.
European company Pepco also notes that the arrival of its autumn and winter products has coincided with sustained record warm weather in its core markets of Central and Eastern Europe.
“When it’s 26 degrees outside, you don’t sell coats,” Pepco Executive Chairman Andy Bond said on a call with analysts on Thursday.
In the last few years, the so-called holiday shopping season starts as early as October as many retailers offer discounts and sales throughout the month and into December. Amazon.com will run its second Prime Day campaign on October 10-11, Best Buy in the US is offering a 48-hour sale on the same dates, and Target has a Deal of the Day program starting in October.
In the US, temperatures could rise by 1-6 degrees Celsius on average in the October-December period compared to last year, Weather Trends International said.
“The month from Black Friday through Christmas will be much warmer than a year ago, leading to more excess inventory and steeper markdowns,” said Bill Kirk, CEO and founder of Weather Trends International.
This will likely affect retailers from Walmart to Dick’s Sporting Goods the most, but could help Costco Wholesale and discounters like TJX, which will likely source products locally and be able to adapt to seasonal changes sooner.
“If winter wear doesn’t sell well, that will be a problem for the industry this holiday season, and if that’s the case, then we could see a lot of markdowns in that type of merchandise in early 2024,” said Morningstar Research analyst David Schwartz.
Adverse weather usually becomes a major concern for retailers as they place orders and ship items for important seasons well in advance to ensure there are enough products on the shelves to meet customer demand.
“The problem with most high-volume retailers is that 75% to 85% of their production depends on a very long development cycle … so by the time heat or cold starts to affect overall buying trends, they’re already committed to these orders,” said Robert Woods, founder of Vision Brands USA.
Kristen Darcy, chief marketing officer of clothing retailer True Religion, told Reuters in an interview: “What has been a pleasant surprise is that we continue to see T-shirts and shorts sell very well as a result of the warm weather”.
“Our biggest purchases of the season are not outerwear, which would be heavy jackets for very, very cold weather, but … for activities, which are lighter tops and bottoms, denim of all varieties … and then that and lighter knits’.
Abercrombie & Fitch also said there was strong demand for “seasonless products” in the second quarter, particularly in the men’s category, as customers opted for year-round clothing and styles.
When retailers try to stock seasonally appropriate clothing and it doesn’t sell, it becomes expensive to stock such items.
Simon Wolfson, chief executive of British clothing retailer Next, said that in terms of the sales outlook, “the difference the weather will make in December will be bigger than the difference in how the consumer feels”.
2023-10-08 14:28:00
#Winter #jackets #sweaters #piling #stores #warm #weather #threatens #holiday #season
