It’s well known that fashion retailers are one of the worst hit in this global pandemic. Many online and offline stores have been closed for months. The stock of unsold inventory piling up in the warehouse is causing a big problem for retailers. Many had to shut down some of their stores permanently. According to the Centre for Retail Research more than 20,600 stores are expected to close shutters forever. The ones who managed to survive still have to deal with mounting stock of last season.


According to retail analysts there could be EURO 15B worth of unsold stock. This does not only include the leftovers of the previous season but also the fresh line of clothing of current one. For the cash flow and operation cycle to run smoothly, unsold stock needs to be cleared. Such desperate times have forced retailers to resort to heavy markdowns and alluring discounts, due to which the industry is going to face intense price war in the coming time. It's simple math, the one giving more discount will be able to clear more stock. This cash will help them to recover the losses that have been incurred during lockdown. Price monitoring, regulation, tracking competitors mark down strategy needs to be focused upon if a retailer wants to emerge as a winner.



Many retailers are already on it and have started planning heavy sales. Marks & Spencer started its ‘Rainbow Sale’ at 50% across the unsold spring and summer clothing item. Next, one of the UK’s biggest online retailers has said that they could have suffered a loss of 150M  and is planning huge sales as soon as lockdown is relaxed. Mytheresa, John Lewis, Debenhams are amongst many retailers offering markdown ranging from 20% to 70%.Topshop, Miss Selfridge and French Connection are offering discounts of up to 50% on online shopping. All these retailers are very close competitors of each other and are trying to entice customers through various offers to increase the sales.

The discounts being offered are proof of how intense competition is going to get. While offering markdowns, retailers must keep in mind not put themselves in a position where their margins are irreparably damaged. This might also compromise their brand image once the situation is normal.


The road is going to be tougher for retailers like Primark, which has only offline presence. Even if they mark down their prices, they would still have to practice social distancing and crowd control measures. This will directly affect their footfall and hence overall sale. Customer's psychology and fear of entering an offline store would also play an important role.

They would have to provide more reasons for customers to visit the shop and also ensure their safety. The situation is even worse for retailers who focus on smart and office wear clothing due to the shift towards 'Work From Home' culture. Pricing will be an important decision for them. This is an important learning for all to adopt the the multi channel model.



Retailers need to be very prompt with their pricing decision. Blindly offering discounts with the intention of capturing the market will serve no good. Understanding the audience, the line of clothing they offer, customer’s spending power, categories with high demand, competitors strategy are all these factors are going to play a very crucial role.

Another important factor is willingness of customers to spend money. Different categories have shown different levels of demand. Along with this, retailers also need to make decisions on how much of new stock should be purchased for next season so that pressure doesn't mount up three months from now.

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