Discussions about the fashion industry thread

[gdl203]

Is there an equation for the "hard cost" of not selling a piece of clothing? Obviously you have the cost that went into producing it, and the cost of acquiring it if you're a third party seller. But what are the hard costs of keeping it in stock? Is it just the space costs of storage?

Or is it that those funds need to be freed up for next season's buy - so selling it at a discount becomes a necessity?

For every day it is in stock, you pay rent for the space it takes, salaries for the people employed, insurance for the inventory, cost of debt if you're using credit lines to finance inventory. That's excluding cost of capital, which should be factored in as well for a true understanding of return (i.e. what return would the company expect to get if investing that same money into an alternative investment). Every dollar used for this is not used for something else.

 

[Texasmade]

Is there an equation for the "hard cost" of not selling a piece of clothing? Obviously you have the cost that went into producing it, and the cost of acquiring it if you're a third party seller. But what are the hard costs of keeping it in stock? Is it just the space costs of storage?

Or is it that those funds need to be freed up for next season's buy - so selling it at a discount becomes a necessity?

It's tying up cash in inventory. The longer it sits there the more money you're losing.

 

[hammerhead_corvette]

In defense of the sale hunter; as a person who has enough clothes to last them the next ten years there is no reason for me to purchase clothes except out of enjoyment. Sometimes I see something that I wouldn't have necessarily purchased for full price but at a discount it looks appealing and I am willing to give it a try. I am fine with final sales as part of the discount process. The company drops the price and I accept the risk that I might be stuck with something that doesn't fit or I don't like. Probably something more companies should adopt.

Part of the reason I order things from sales is to support companies I like. I purchased two ties on clearance at the start of COVID simply because I wanted to help out. I rarely wear a tie, maybe 5-10 times a year. With that said, I will purchase clothing at full retail if the item has something unique and/or enjoyable. While some of the problem with high end or MIUSA clothing is that people don't want to pay retail, I believe sale hunters with disposable income may help companies off load that extra merchandise left over from last season.

 

[dieworkwear]

In defense of the sale hunter; as a person who has enough clothes to last them the next ten years there is no reason for me to purchase clothes except out of enjoyment. Sometimes I see something that I wouldn't have necessarily purchased for full price but at a discount it looks appealing and I am willing to give it a try. I am fine with final sales as part of the discount process. The company drops the price and I accept the risk that I might be stuck with something that doesn't fit or I don't like. Probably something more companies should adopt.

Part of the reason I order things from sales is to support companies I like. I purchased two ties on clearance at the start of COVID simply because I wanted to help out. I rarely wear a tie, maybe 5-10 times a year. With that said, I will purchase clothing at full retail if the item has something unique and/or enjoyable. While some of the problem with high end or MIUSA clothing is that people don't want to pay retail, I believe sale hunters with disposable income may help companies off load that extra merchandise left over from last season.

I wrote that PTO post, and I also write about sales shopping, bargain hunting, and eBay finds. I obviously don't have a problem with sales shopping. I was just trying to point out a connection between people's own behaviors and their shock that some businesses are closing.

Sometimes I'll see people say they're sad classic menswear is disappearing. Or how a factory, brand, or retailer is closing. But they don't seem to make the connection between these things and their own behavior. If you want something to survive, you have to purchase at full price every once in a while. Businesses can't survive on 50% off sales.

Sales shopping serves a purpose. I'm sure some stores would rather sell something at a 50% discount than not sell it at all. I've also bought things on sale to experiment. Don't think it's an either/ or thing (always shop on sale or never shop on sale). You can shop on sale sometimes and also pay retail when you think it helps to support companies you care about.

 

[double00]

^ iirc one of your theses was that retail had effectively 'trained' customers to ultra competitive pricing? i think of that more as ethical production issue, even if the onionesque point remains.

imo one of the worst tendencies of our age is to split a whole human into components. the moneyball thing that separates functions of production/consumption and leads to concepts like 'comparative advantage' that then get reified politically. and here we are. does it all still feel 'efficient'?

 

[Mariokartfever]

This reminds me of when Toys R Us closed and all my peers on social media where blaming PI firms for "killing" the brand when none of them had stepped inside a Toys R Us in two decades.

 

[ValidusLA]

I wrote that PTO post, and I also write about sales shopping, bargain hunting, and eBay finds. I obviously don't have a problem with sales shopping. I was just trying to point out a connection between people's own behaviors and their shock that some businesses are closing.

Sometimes I'll see people say they're sad classic menswear is disappearing. Or how a factory, brand, or retailer is closing. But they don't seem to make the connection between these things and their own behavior. If you want something to survive, you have to purchase at full price every once in a while. Businesses can't survive on 50% off sales.

Sales shopping serves a purpose. I'm sure some stores would rather sell something at a 50% discount than not sell it at all. I've also bought things on sale to experiment. Don't think it's an either/ or thing (always shop on sale or never shop on sale). You can shop on sale sometimes and also pay retail when you think it helps to support companies you care about.

This is spot on. I try to buy things on sale thar I want, but I usually throw a full price item or two in the cart if I can.

I usually do this more readily when buying direct than from a third party aggregator (though this is not logical per see).

 

[Texasmade]

I usually buy my cheaper casual clothes on sale or go really cheap like Gap jeans and shorts or t shirts and underwear from Target. Nicer stuff like my Corthay or bespoke John Lobb shoes I just pay full price. Only bespoke item I get on sale are my dress shirts when my shirt maker has a 15% off during Father's Day weekend.

 

[IJReilly]

?

The only thing I will say is that the quality I’ve seen and personally experienced from most American production just isn’t that good. We had a meeting with the person who was running sales and collaborations for all of Brooks’ made in US factories and the costing was ludicrous for the capability of make.

Why do you think that is? In general, I’ve often seen you criticize production in Italy as well. Is this mainly a cost issue, meaning they simply can’t give their employees enough time to do things well (I imagine a product could turn out better with 10 hours of cheap labour va 4 hours of expensive labour, for example)?

Just curious about your take on it.

 

[IJReilly]

A question for those who know retail: what would happen if we had regulated sales times? If the government hypothetically said: sales can only be done at the end of August and the end of January, how would that affect pricing and supply?

Maybe these things are impossible to regulate in a global economy, but still curious.

 

[clee1982]

Isn't that how it works in Europe?

 

[clee1982]

I'm definitely of the opinion that over supply is the bigger issue than pricing discipline, thus I expect a lot to be out of business. I think pricing discipline is one thing but even that is only to a limit degree when consumer has so much choice out there.

 

[Mghart]

How much is it also a part of US buying culture in which people are so accustomed to waiting for sales? Not sure if it’s similar in other countries.

I don’t remember the last time I bought clothes or shoes on sale but it has been ages.

 

[IJReilly]

Isn't that how it works in Europe?

I can only speak for Sweden, but here a good has to be available at a certain price for a certain period of time before it can go on sale. We still have mid season sales but nowhere near what it seems to be like in the US. Not sure how digital coupons fit into that system.

 

[jalebi]

Isn't that how it works in Europe?

Regulated sales windows are only a thing in France I believe. As mentioned above though, in the UK and other countries goods need to have been on offer for X days at the 'before' price a retailer advertises.