All that winter stock

 

It’s no secret, in spite of devastating price cutting, that the clearance of 2010 winter garments has been very poor. My question is, what happened to the clobber that didn’t sell?

My friend Doctor Quack-Quack tells me that the little shops, having no room for stock holding, take it home and pile it up in spare rooms and garages from whence it will be re-presented next winter. This has three nasty consequences.

One, these already stressed retailers are expected to pay for the stock but can’t until summer takes off. In other words, Peter has to pay Paul. Trouble is, Peter is already being knocked around by silly summer sales (30 and 40 per cent off) which began in September, so his ability to pay Paul is compromised.

There is now a dramatic slowdown in payment times. Some of the previously perfect payers have become grossly imperfect.

Two, the stock carries last season’s styling and colours. Maybe the classics are okay but, for the rest, time has sullied them.

Three, as a consequence of one and two, the retailers don’t have as much open to buy for next winter – or summer repeats for that matter. The whole trade then sags towards inactivity. Dr Quack-Quack also notes there is a strong swing, in the cautious winter ordering that is taking place, towards lower price points. The $99 sell has been moved down to the $89 sell and so towards the floor.

Retailers are grabbing for cheap and cheerful, convinced that is what the consumer wants and, just in case she doesn’t want it, there won’t be so much to lose when it has to be marked down.

As to the big stores, where are their leftovers from winter? Have they been lowered into some underground cavern awaiting direction from on high? Some, of course, were cancelled with overseas suppliers or force-held by hapless local importers. There is a graveyard of winter stock that simply won’t go away. These goods will probably be exhumed in stinking-hot January for an opening winter sale.

Chickenman has a solution!

Although Chickenman is a distant relative of Dr Quack-Quack, they occupy different sectors of the industry and have quite different views. I must say, I’m taken with Chickenman’s latest analysis.

He has declared that there is a revolution going on in the supply of fashion goods to small and medium-sized retailers who cannot run their own import programs. They have had the socks scared off them by the currently ending winter.

Many of them blame the system of having to indent a long way ahead and then suffering buyers’ remorse. They know that if they don’t place indent orders they won’t get the goods – and that will cancel any chance they have of making a profit out of winter.

Enter the new breed of wholesalers. They are typically Asian entrepreneurs who seem to have gathered in knots in Surry Hills in Sydney, Collingwood in Melbourne and West End in Brisbane.  

These people are in stark contrast to the older-style, European supplier. They research the world market, get what they judged to be the hot sellers, and have them copied by Asian factories often owned by a family member. Currently, China is the favoured source but that may change.

The goods are then brought into Australia by the container load and put into stock – close to and in season. Attracted like bees to flowers, the small and medium-sized retailers buzz in and buy.

These suppliers don’t offer payment terms, so there are no bad debts. They don’t do deals on advertising subsidies, markdown allowances and anything else on the big retailers’ gouge-lists. Pay and carry away is their motto.

There are certain benefits passed on that Chickenman was cagey about but I’d guess one of them might be that if you’re a big customer they won’t sell to the shop next door to you.

“It’s all about the power of relationships,” Chickenman clucks with enthusiasm, adding that these wholesalers do not sell to consumers wandering in off the street thinking they’re in a shop.

They got away to a bad start when their styling erred on the tizzy side and their quality was dodgy. But that is changing rapidly, driven by the market that wants Australian-compatible styling and reliable quality. Chickenman says they are now up there with the best of both.

What these importers currently lack is brand. Building a brand costs money and they’d rather put that towards sharper pricing. Even their company names are not bandied about in the trade. They are not quite as concealed as Australian contract makers, but they come close.

Chickenman predicts a big future for these wholesalers because they take the risk out of buying, they are keenly priced and their goods won’t be found in the big chains.