Fashion’s excess inventory problem is on the way to being alleviated. New moves from Amazon and other companies show that retailers and fashion brands are finding new ways to shed what has become a pandemic problem: stockpiled product for spring with summer already here.
The biggest announcement, or formalization of a previous announcement, comes from Amazon. It has now set a date for its “Summer Sale” event that’s designed to give the company and its sellers a post-pandemic boost that is usually accomplished via Prime Day.
The company sent a notice to sellers Tuesday stating that it’s hosting a “Fashion Summer Sale Event” on June 22, according to a document viewed by CNBC. The notice says the event is by “invitation only” and it’s expected to run anywhere from seven to 10 days.
“The Big Style Sale is slated to take place later this month and will include seasonally-relevant deals from both established and smaller fashion brands,” the spokesperson said in a statement. “We are delighted to help brands connect with our vast global customer base for this event.”
Amazon is still finalizing details around the event, according to CNBC and other sources, and has been given a working title of the “Biggest Sale in the Sky.” The company asked sellers to submit deals for items with a discount of at least 30 percent by the end of the day on Wednesday.
The inventory issue is also being addressed by a new series of online liquidators. For example, Otrium, an online fashion marketplace whose stated mission is to help “global and independent clothing brands sell end-of-season collections that would otherwise go unsold,” recently announced it has raised €24 million in Series B funding, in a round led by Eight Roads Ventures (Alibaba, Treatwell, Made.com).
Otrium’s fashion marketplace gives brands control over pricing, merchandising, and visibility of their excess inventory. It works with more than 200 brands including Joseph, Reiss, G-Star, Asics, Puma, Vans, Pepe Jeans, ALEXACHUNG and Scotch & Soda. Their products are marketed to 1 million registered Otrium shoppers.
“Extending fashion’s life cycle and finding customers for excess inventory at the end of a season, has been a challenge for brands for years,” says a statement from Otrium. “With the new generation of consumers showing increased awareness around sustainability, there’s a demand for innovative retail models offering solutions for end-of-season stock. This is now even more pressing as the industry responds to Covid-19 with usual sales channels severely disrupted, and clothing piling up in warehouses. According to McKinsey, the value of excess inventory from spring/summer 2020 collections is estimated at €140 billion to €160 billion worldwide (between €45 billion and €60 billion in Europe alone) — more than double the standard level for the sector.” Otrium said that since the beginning of the pandemic it has seen interest from brands double, and the firm’s revenues grew 40 percent in the past month.
“We’re committed to helping our partners get the most value out of their last season’s collections, and we [realize] that this need has never been greater,” Otrium CEO and Co-Founder Milan Daniels. “We are focused on onboarding an unprecedented pipeline of brands and we’re working on generating revenue for items that would otherwise go unsold. We have increased distribution capacity to ensure more brands can deliver their orders quickly and safely to consumers’ homes.”