Retail chiefs say billions of pounds worth of clothing is being prepared for huge ‘liquidation sale’
Billions of pounds worth of clothing is being prepared for a huge ‘liquidation sale’, retail chiefs have told The Mail on Sunday.
High Street retailers are desperately looking for signs of an end to the Government lockdown – but fear the opportunity to sell spring and summer ranges will disappear over the coming weeks.
Executives and suppliers said each week that passes will lead to ever more drastic discounts when shops reopen, with estimates already circulating that the value of unsold stock ploughed into the sale could be more than £10 billion.
Fear: Executives and suppliers said each week that passes will lead to ever more drastic discounts when shops reopen
One senior source said ‘hundreds, probably even thousands’ of containers full of clothing, footwear and accessories are sitting in the ports of Southampton and Felixstowe.
He added that more still is in shops and vast warehouses up and down the country stocked up ahead of the busy Easter break and May bank holiday periods. Many retailers now expect this will end up being cleared at cost price – about 50 per cent off – but more likely far less.
Advertising campaigns are being pencilled in to launch what one executive described as ‘the Sale of the Century’.
He said: ‘People don’t realise how fast this industry moves. Every week that goes by is an unfolding disaster for the high street but most people won’t see the effects of this until retailers start going bust or when the shops reopen, whichever happens first.
‘When shops do eventually reopen it’s going to be a race to get rid of stock faster than everyone else.’
Retailers are already beginning to feel the pain, with Debenhams understood to be preparing its second financial restructuring in 12 months and Cath Kidston lining up administrators.
Most large chains, including Primark, have already cancelled weeks or even months worth of stock.
Suppliers say this has ‘crucified’ manufacturing hubs, particularly Bangladesh. One supplier said the two-week Easter break is a key selling period when retailers can shift ‘the equivalent of five or six weeks of stock’.
He said after that it would be ‘something between damage limitation and disaster’.
‘It’s going to be very bloody. If we have another month of this after the end of April then I think we are going to see more and more retailers go,’ said Tony Shiret, an analyst at Whitman Howard.
Pippa Stephens, retail analyst at GlobalData, said the £53 billion-a-year clothing and footwear sector ‘will be one of the worst hit retail sectors’ because the summer selling season will ‘be a write-off’.
She predicted that fashion sales in 2020 will be down by up to 23.5 per cent.
She added: ‘When they are able to start operating again, a large proportion of products will be out of season and no longer on-trend.’