In recent weeks, the retailers have revealed that they are packing away unsold merchandise to put it back on shelves later this year and in 2023.
“We’re confident that we will be able to integrate our pack and hold inventory with future assortments,” said Gap finance chief Katrina O’Connell, describing the company’s plan to sell its leftover inventory, including tank tops, shorts, and short-sleeve shirts from summer of 2022.
Gap, for one, has seen its inventory increase by 37% during the last quarter, with its pack and hold strategy contributing to a ten percentage point increase, CNN Business reported.
Kohl’s, on the other hand, is planning to sell sleepwear and fleeces, which it previously packed away for the upcoming holiday season. The company currently has $82 million worth of inventory.
While Kohl’s and Gap are taking a pack-and-hold approach, others are offering deep discounts to reduce their inventory levels — an approach that helps cut losses and frees up warehouse space but tarnishes brand image.
Retailers’ inventory challenges are arising from a tepid demand as consumers are holding back on discretionary spending in response to high inflation rates.
