As clothing stores reopen, retailers face excess inventory

As retail headed into March, Florida-based clothing chain Bealls predicted a peak shopping season, second only to Christmas sales.

Then COVID-19 began to sweep the country and the company announced that it would temporarily close its stores from March 20 “out of an abundance of caution”. Now, as states begin to lift their restrictions, retailers like Bealls are dealing with a glut of items they couldn’t sell during the shutdowns.

Many may find that they have to heavily reduce parts of their inventory to attract customers at what is traditionally a slow time of year.

“Most retailers have inventory that they will want to clear, so the consumer will ultimately win by seeing fantastic deals,” said company president Dave Alves.

Faced with excess clothing, about 20% of Bealls’ inventory is now on clearance. However, because Bealls is a southern chain, it didn’t have to worry as much about an excess of heavier winter items after reopening, Alves said. With most of its stores based in the same region, Bealls could also resume stores within weeks of each other as those states were following similar reopening timelines.

“We don’t necessarily expect to replace all of those sales right away,” Alves said. “We expect it will probably take a year for sales to normalize again.”

Small businesses in the Tampa Bay area don’t have to worry so much about out-of-season items, as the weather remains fairly consistent.

“You can basically wear most items year-round,” said Tammy Bush, owner of the Caia boutique in St. Petersburg. “It just depends on the prints you choose that make a difference of ‘Is it too spring or too winter? “”

However, local businesses are not spared from all inventory issues. Sara Stonecipher, owner of MISRED Outfitters, said many smaller retailers buy their clothes from Los Angeles businesses. While some people encouraged her to sell her clothes at a deep discount online during the COVID-19 shutdowns, she balked. With much of Los Angeles still closed, Stonecipher worried that they might not have enough inventory when they reopen if they marked down clothes online.

At this point, she has the opposite problem. Stonecipher received its biggest shipment of clothing the week its business closed due to COVID-19. She had planned a high season in March and April. The summer business season in St. Petersburg, on the other hand, is “dead as a doornail,” Stonecipher said.

As the pandemic is also dampening business, she seeks to maximize sales among those who come to the store.

“The reality is we’re going to have a lot fewer people coming in,” she said.

Seckin Ozkul, a professor of operations and supply chain management at the University of South Florida, said small businesses are much more likely to be hit hard by coronavirus shutdowns. Meanwhile, larger companies that sell through multiple channels — both online and in person — will fare better. However, in all areas, companies with excess inventory will seek to dispose of these items.

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“Sitting on inventory is expensive,” Ozkul said.

Consumers can expect to see marketing campaigns advertising sales of such items as stores seek to shed off-season inventory, he said.

“Now is the time to go to the retailers that are opening and see what kind of promotions they are offering,” Ozkul said.

Anne G. Cash