What are retail companies doing with their unsold clothes during this pandemic?

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Malls have experienced several store closures since the start of the COVID-19 pandemic. July 28, 2020. Photo credit: Jordan Kartholl/The Star Press via Imagn Content Services, LLC

When was the last time you put on real clothes — like with buttons — and shoes that weren’t slippers? With safer-at-home orders, millions of people have been staying in their pajamas or sweats. That means the fashion industry is in deep trouble, and there will not be Fashion Week next month. Department stores that have been around forever have filed for bankruptcy.

“It’s a big problem for high fashion brands and mass market brands as well. These brands make seasonal clothing. … So once the season is over, many of them consider that these products are no longer going to sell as expected, and so many of them are booking big write-downs on the clothing that they haven’t sold,” says Matthew Dalton, Wall Street reporter covering the luxury industry. “These collections are sitting in their inventories, taking up space, costing them money. So they’ve got to figure out what to do with a lot of these unsold leftover clothes.”

Some companies are even burning their clothes. He says if designer fashion labels don’t want their leftover clothes appearing in second-hand shops and/or sold at a fraction of retail price, they ensure that by burning the garments.

“From a perspective of a brand like Dior or Saint Laurent or Louis Vuitton, if their goods are going to be appearing on sale in a discount store six months after one of their clients has just bought the same thing for full price … that’s going to really make their clientele angry. From that perspective, that will diminish the brand,” says Dalton.

Dalton says companies also try to sell their leftovers to employees (plus their friends and families). Then they send the items to recycling facilities. “Louis Vuitton bag could be shredded, all evidence of the brand is removed, then turned into insulation.”

Mass market brands sell clothes to discount retailers such as TJ Maxx or Ross, and they’ve been giving clothes to charities during the pandemic, Dalton says.

Credits

Guest:
Matthew Dalton - Wall Street reporter covering the luxury industry

Host:
Madeleine Brand

Producers:
Sarah Sweeney, Michell Eloy, Amy Ta, Rosalie Atkinson, Brian Hardzinski, Angie Perrin