Shipment Delays Are a Boon to Discount Retailers, Shoppers
A Seasonal Mismatch
Supply-chain bottlenecks are leaving name-brand stores like Gap (GPS) and Express (EXPR) with empty space on their shelves. This is a result of increased transit time when moving cargo from Asia to the US West Coast. Shipments typically take about 100 days — twice as long as two years ago.
Big brands sell excess merchandise to discount chains when they move into a new season. Now deliveries are often made so late that the clothing is only briefly displayed, if they are offered at all. This leaves the full-price players wanting, and the discounters awash in merchandise.
Rare Opportunity for Discounters
Off-market retailers, such as Ross (ROST), Marshalls, and T.J. Maxx (TJX), see opportunities in the closeouts. Their business model doesn’t mandate selling just what’s currently in style. They happily accept out-of-season clothes, which are packed away for sale the following year.
This means the supply-chain snarl is presenting these outlets with unique buying opportunities. Plus, the products they’re buying are of a high quality and popularity, given their intended price point.
Enticing Choices for Consumers
Consumers who shop at discount stores may be thrilled to find brands and merchandise that are usually only available at more upscale locations. There may also be a wider variety on display, potentially at even better prices than what is typically offered by these retailers.
The shopping bonanza may continue for a while. If today’s spring merchandise arrives too late in the season, it’s reasonable to expect it on outlet shelves in 2023. Likewise, the fall 2021 line may emerge from hibernation later this year. It’s enough to spur a closet-cleaning, if for no other reason than to make some room for the bargains.
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