Within an inflationary context, the easing of the supply-chain limits and the relaxing of Covid-19 restrictions, consumer demand and priorities changed without much notice. This means retailers have little time to adapt, now cutting margins to clear excess inventory.
In the USA, retailers are liquidating excess inventory with promotions in a context of high inventory levels. According to UBS Lab, in September 2022, the average discount for fashion retailers was 16% in the U.S.A., compared to 15% a year earlier. Now, shelves are full of comfortable clothes, which were best sellers during Covid-19 but are now selling at a discount. But clearly, such discounts heavily reduce profitability. Kohl’s, whose inventory jumped 48% to about US$4 billion, decided...
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