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What to Do with Heaps of Unsold Inventory? Denim Experts Weigh In

Though garment workers’ rights organization Clean Clothes Campaign estimated that 100 billion garments are produced each year—enough to distribute 14 items to every living person on Earth—a good portion of those products are never even sold. Instead, they’re significantly marked down, sent to discount retailers, donated, or, in some cases, destroyed—the latter of which was met with scrutiny when brands like Burberry, H&M, Nike and Urban Outfitters were caught doing so in 2018.

With more awareness surrounding fashion’s waste woes, and a growing emphasis on more responsible business practices, destruction of new goods is likely becoming a problem of the past. In 2020, France became the first country to ban the destruction of unsold non-food products. Its anti-waste law forbids companies from sending their unsold goods to the landfill or incinerator, and instead forces them to reuse, donate or recycle them. More and more companies are facing real pressure to either find creative solutions to excess inventory, or risk fines.

Fortunately, the opportunities to repackage unsold goods are expanding by the day. For years, size-inclusive denim brand Universal Standard has offered Mystery Boxes to help move inventory by packaging unsold products in new and exciting ways for customers.

In February, the brand unveiled its 2022 range of boxes featuring 11 different themes including Denim on Denim, Classics for Spring, Smart Traveler, Best Sellers, Tops, Premium Jersey, Archival Treasures, Dresses, Luxe Lounge, Petites and Surprise Me Lite.

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Each box contained three on-theme garments chosen based on consumer-fed data like sizing and preferences selected prior to checkout. Shoppers don’t know exactly what they will receive, but are promised an average savings of 52 percent per box.

The concept is gaining traction in the luxury space as well. LVMH Luxury Ventures, the investment entity operating within the LVMH Group, and venture capital firm Antler recently invested $5 million in London-based circular startup Heat, which packages unsold luxury items into mystery boxes. The brand teases boxes on Instagram filled with items like Balenciaga jean jackets, Amiri sneakers and Palm Angels tees.

The denim supply chain is also developing sustainable innovations to breathe new life into stagnant creations.

Finishing technology firm Jeanologia developed a system specifically for this purpose. Its “reTECH” concept updates deadstock using its laser technology which “offers infinite design and garment finishing possibilities.” Its eDesigner software is especially important to the process, as it enables designers to visualize how the updated garments will appear.

“ReTECH makes it possible to change a garment’s look with minimum cost,” said Carmen Silla, marketing director at Jeanologia. “We’re able to give it a totally new look and adapt it to new trends without sacrificing the look, and speed up the time to market to quickly answer the overstock problem.”

Los Angeles-based denim laundry Star Fades International (SFI) offers similar deadstock updates, and was inundated with related requests during the height of the Covid-19 pandemic, when deliveries were disrupted and companies had no choice but to make the most out of what they already had.

According to Alaina Miller, vice president of full package operations at SFI, the requests are coming through much more sporadically now.

“Rewashing existing inventory happened so much in 2020 and 2021 because of Covid that most brands” weren’t “sitting on a lot of extra inventory” by spring this year, she said.

The denim supply chain experienced a number of sustainable innovations in 2021 related to chemicals, trims, fibers and more.
SFI’s Natural Selection collection Courtesy

Miller said the laundry would often update clients’ inventory by applying distressed elements such as cut and frayed hems, knee rips and extreme tears, as well as wash treatments like bleach dip, an all-over novelty laser pattern and acid wash.

The DenimFWD lab, a new “urban factory” and laundry that opened in 2021, has several tools it uses to update small batches of unsold goods, including the latest technologies in laser, ozone, garment dye and digital printing. Though the supply chain disruptions have somewhat evened out since 2020, challenges are still being felt today—and Carlos Arias, CEO at DenimFWD, said those problems could be ameliorated with small upgrades.

“We are very aware of the important challenges being faced by brands and retailers in this difficult environment where lead-times have become very long and unreliable,” he said. “Repurposing inventory that is slow-moving could be a great tool to freshen up the look of stores and can serve as a bridge of newness until future orders arrive.”

While repurposing existing product offers a quick solution for waste, it’s not without its own set of problems. Arias noted that many brands are hesitant to look to these solutions because the teams that originally design the product are not connected to the inventory that’s delivered to stores. Basically, once a design is finished, designers often jump right into the next new product.

“This disconnect makes slow-moving inventory a problem you fix through discounts,” he said. “Creativity stops counting in your favor as a brand.”

Arias added that, while he does see more brands considering these creative solutions, their organizational structures “get in the way”—a shame, he said, since updating products could serve as effective product testing for small batches.

“Imagine you use the updating of a slow-moving style to try new ideas that can later support your decision-making in the next season,” he said. “Companies could set up an innovation team—complete with finance members to show how liabilities turn into value-added products—that can quickly make decisions and define product and process.”