Fashion retailers may have to write off billions of pounds of stock
By Sarah Wood | 16th April 2020
An unprecedented amount of clothing is piling up in warehouses around the UK as fashion retailers are unable to sell spring and summer stock.
With the majority of physical shops in the UK closed under the government's lockdown, sales of non-food items are down by 70 per cent, as reported by Retail Gazette. £18 billion of spring and summer clothing is building up in warehouses, as shoppers are forced to stay at home.
It's thought that spring and summer will be a write-off for most retailers, with excess stock set to flood the market in June and July, leading to significant discounting in an attempt to shift the stock. Retailers who focus particularly on the latest trends are set to be hit the hardest.
Research by Retail Economics and Alvarez & Marsal found that more than 50 per cent of non-food retailers in the UK are set to run out of cash in the next six months, with all major non-food retailers currently operating in negative cashflow.
Every year, the UK fashion market makes £55 billion in sales. The months between March and June, those likely to be most affected by the pandemic, account for a third of the annual sales.
With many fashion retailers already struggling before the coronavirus crisis, this latest blow is likely to lead to yet more companies going into administration.
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