Consumers are shopping but that does not mean that brands/retailers’ inventories are not up. Retail inventories grew by 2% in June (up from a 1.6% increase in May), the U.S. Commerce Department said this week, pointing to an 18.5% overall rise in “business inventories” on a year-on-year basis in June. Retail titan Walmart revealed this week that “it had cleared most of its summer seasonal inventory,” per Reuters, “but still had work to do in reducing stock of electronics, home goods and apparel.” In reporting its results for the 3-month period that ended July 30, Target revealed that its profit fell by nearly 90% year-over-year due, in large part, to “steep markdowns” on sizable quantities of unwanted merchandise.
Not limited to mass-market entities, Michael Kors and Versace owner Capri Holdings reported earlier this month that for the quarter ending on July 2, it was left with $1.265 billion in inventory, a 66% increase over “a historically low level [of inventory] last year” when the group “did not have enough inventory to meet consumer demand.” On the other hand, management for Kering said in a first-half earnings call with analysts in late July that its inventory is “currently under control,” and the Gucci, Balenciaga, and Bottega Veneta owner is working to “rebuild inventories” from low levels in 2021.
In cases that caught my eye this week (and last): Deckers has lodged a number of new complaints against the likes of Steve Madden, Roolee, and Mata Groups USA, accusing the defendants of infringing the trade dress and design patents for its various footwear brands, including Ugg and Teva. (You can find the Deckers v. Madden complaint here.)
And in deal-making news this week: Authentic Brands Group will add a new name to its increasingly-lengthy roster of brands, as it has agreed to buy British fashion company Ted Baker in a deal that is worth approximately 211 million pounds ($254 million). At the same time, British e-commerce group Boohoo snapped up a 7.1% stake in Revolution Beauty, whose products it currently offers by way of its own companies’ sites.