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Fashion retailers in Shanghai stuck with unsold inventory


Fashion retailers in Shanghai are stuck with piles of unsold inventory even a month after Shanghai lifted its strict COVID-19 lockdowns as cautious consumers are staying away from the commercial hub's glitzy shopping districts.

Curbs to stop the virus in Shanghai, China's fashion capital, ground the city to a halt in April and May, leaving clothing and beauty product displays in stores untouched and containers of imported apparel stranded at port.

The city's re-opening this month saw a flood of goods ship from warehouses to store shelves already laden with merchandise unsold during two months of lockdown. Normally around a fifth of all imported goods coming into China pass through Shanghai's port.

Days after COVID-19 curbs eased, large sales signs went up across Shanghai, with retailers from Lululemon to Victoria's Secret offering discounts to lure shoppers.

Even online retailers have struggled to clear a glut caused by lockdowns and supply interruptions. Josh Gardner, Founder and CEO-China, Kung Fu Data, which manages online stores for 10 fashion brands said, in April, May on platforms, there wasn't a T-shirt to be found, we were sold out of summer stock and so was everyone else, there was just no product, he added.

China is a major market for personal luxury goods companies with sales reaching $74.4 billion in 2021, according to Bain.

During "618" – a major shopping event in China from May 31 to June 20 - across the main e-commerce sites, such as Tmall and, were flat year-on-year. In the event's opening week, data from Tmall showed men's wear sales had dropped 22 per cent and women's wear was down 4 per cent , although activewear sales rose 26%, possibly due to an increased focus on fitness during the lockdown.

For now, some retailers are warehousing inventory and ordering less for the fourth quarter when they will try to clear existing stock through November's Singles' Day.


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