As clothing stores reopen, retailers face excess inventory

As the retail business headed into March, Florida-based clothing chain Bealls anticipated a peak season in purchases, second only to Christmas-time sales.

Then, COVID-19 began to sweep the nation, and the company announced it would temporarily close its stores starting March 20 “out of an abundance of caution.” Now, as states are beginning to lift their restrictions, retailers such as Bealls must address a surplus of items they couldn’t sell during shutdowns.

Many may find they have to steeply discount parts of their inventory to attract customers at what is traditionally a slow time of year.

“Most all retailers have inventory they’re going to want to be clearing out so the consumer at the end of the day is going to win by seeing some fantastic deals,” said Dave Alves, the company’s president.

Faced with excess clothing, about 20 percent of Bealls’ inventory is now on clearance. However, because Bealls is a southern chain, it did not have to worry as much as about an excess of heavier winter items after reopening, Alves said. With most of its stores based in the same region, Bealls could also resume stores within a few weeks of each other, as these states followed similar timelines for reopening.

“We’re not necessarily expecting to replace all those sales right away,” Alves said. “We do expect it will take probably a year for sales to normalize again.”

Small businesses in the Tampa Bay area don’t have to worry as much about items going out of season because the weather stays fairly consistent.

“You can basically wear most of the items year round,” said Tammy Bush, owner of Caia’s Boutique in St. Petersburg. “It just depends on the prints that you’re picking that makes a difference of ‘Is it too spring-like or too winter-like?’”

However, local businesses are not spared all inventory issues. Sara Stonecipher, owner of MISRED Outfitters, said many smaller retailers purchase their clothing from companies in Los Angeles. While some people encouraged her to sell her clothing at a deeply discounted rate online during COVID-19 closures, she hesitated. With much of Los Angeles still shut down, Stonecipher worried she wouldn’t have enough inventory when reopening if she marked down clothing online.

At this point, she has the opposite problem. Stonecipher received her largest shipment of clothing the week her business closed due to COVID-19. She had anticipated a peak season in March and April. The summer business season in St. Petersburg, in contrast, is “dead as doornail,” Stonecipher said.

As the pandemic also puts a damper on business, she’s looking to maximize sales among those who do come to the store.

“The reality is we’re going to have a lot less people coming in,” she said.

Seckin Ozkul, an operations and supply chain management professor at the University of South Florida, said small businesses are much more likely to be hard hit by the coronavirus closures. Meanwhile, larger corporations that sell through multiple channels — both online and in-person — will fare better. However, across the board, businesses with surplus inventory will be looking to clear these items.

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“Sitting on inventory is expensive,” Ozkul said.

Consumers can expect to see marketing campaigns advertising sales on these items as stores look to rid themselves of out-of-season inventory, he said.

“It is a time to go to those retailers that are opening up and look at what kind of specials they are running,” Ozkul said.