Heavy winter sweaters, coats pile up at shops as warm weather threatens holiday shopping season

Unseasonably warm autumn weather from the US to Europe is denting sales of heavy sweaters and coats as the critical holiday shopping period approaches, executives at major retailers including H&M said, and some shops are already slashing prices to avoid piles of unsold inventory.

In the past year, clothing retailers have sought to clear excess stock that piled up due to a shift in consumer demand to essentials from discretionary items such as clothing. But with fourth-quarter temperatures expected to start off warm, according to weather tracking firm Weather Trends International, shops carrying winter styles and gear could find themselves loaded with inventory at the end of the season.

H&M's upmarket brand Cos has started to offer a 20% off sale online and in shops for knitwear and outerwear clothing, including merino wool sweaters and long puffer coats.

H&M CEO Helena Helmersson told Reuters on Wednesday shoppers are putting off purchases of “heavy” autumnal items amid the warmer than usual weather.

European company Pepco Group also noted the landing of its autumn and winter clothing inventory had coincided with persistent record warm weather in its core Central and East European markets.

“When it's 26°C you don't tend to sell coats,” Pepco executive chairperson Andy Bond told analysts on a call on Thursday.

In the past few years, the so-called holiday shopping season has been starting as early as October as many retailers offer deals and discounts through the month and until December. Amazon.com is set to host a second Prime Day on October 10-11, while Best Buy is offering a 48-hour flash sale on October 10-11 and Target is having a “Deal of the Day” programme from October.

In the US, temperatures could rise by 1.1°C to 6.6°C on average in the October-December period compared with last year, according to Weather Trends International.

“The month from Black Friday to Christmas is much warmer than a year ago which will result in more excess inventory and steeper markdowns,” said Weather Trends International CEO and founder Bill Kirk.

This is likely to hit retailers from Walmart to Dick's Sporting Goods in particular, but could help out Costco Wholesale and off-price sellers such as TJX which are likely to procure products locally and can adapt to seasonal change sooner.

“If winter clothing doesn't sell well, that would be a problem for the industry this holiday season and if that turns out to be the case we may see a lot of discounting of that merchandise in the early part of 2024,” Morningstar Research analyst David Swartz said.

Unfavourable weather usually becomes a major problem for retailers as they place orders and ship items for important seasons far in advance to ensure enough products are on shelves to meet customer demand.

“The issue with most large volume retailers is 75% to 85% of their manufacturing is dependent on a long development cycle ... so once heat or cold begins to affect the buying trends they would have already committed on those orders,” said Vision Brands USA founder Robert Woods.

Apparel retailer True Religion chief marketing officer Kristen D'Arcy told Reuters: “What has been a pleasant surprise is continuing to see the short sleeve T-shirts and the shorts continue to sell well as a result of the warm weather.

“Our deepest buys for the season are not in outerwear, which would be the heavy jackets for the very, very cold weather, but ... in active, which are lighter weight tops and bottoms, denim of all different varieties ... then lighter weight knits.”

Abercrombie & Fitch also said there was strong demand for “seasonless products” in the second quarter, particularly in the men's category, as customers picked out year-round clothing items and styles.

When retailers make an attempt to stock seasonally appropriate clothing and it does not sell, storage of such items becomes expensive.

British clothing retailer Next CEO Simon Wolfson said: “The difference weather will make in December will be greater than the difference in how the consumer's feeling.”

Reuters