Discounting continues post holiday for inventory-heavy brands

What do Nike, Nordstrom, Amazon, Target and Levi Strauss have in common? Large inventories that continue to be discounted after Christmas in order to lower the stock glut.

Target is a prime example with its latest bold promotional event, aptly called the “Target Clearance Run”, offering up to 50 percent of on certain categories. Substantial markdowns are also seen at Nike, Urban Outfitters and Capri Holdings’ brands. Target's share price dropped by 30 percent this year, largely due to its inventory issues.

Investment community Seeking Alpha said many brands and retailers are running promotions well into the new year, as bloated inventories need to make room for new assortment. “Even Lululemon Athletica, a retailer reticent to offer discounts, is offering deals into the year-end after inventories rose nearly 90 percent from lean 2021 levels in its recent quarterly report,” the investment website said.

In the US raging storms and cold spells kept shoppers at home over the Christmas period, with many regions still battling power outages and heavy snow.

“The success of these sales promotions into January are likely to be pivotal to starting 2023 with appropriate inventory levels across the space.”

Data from the U.S. Census Bureau shows clothing retailers held 58 billion dollars of inventory in August, a 28.4 increase from the same time in 2021.

Last month Nike had over 11,000 items on sale on its website, with American Eagle currently having three times as many sale items as it does newness in its women's categories. Just last year retailers struggled to acquire stock amid global supply chain woes. This year the extra inventory is taking longer to shift, especially as consumers are tightening purse strings.