In this article, learn about:
- The full range of exit options for unsold apparel, footwear, and accessories
- How to decide between reorder, carryover, and exit for a given product
- How pack-and-hold and off-price channels work, and where each falls short
- Why inventory destruction is now restricted in the EU
When a season ends, suppliers and retailers have several ways to manage unsold apparel, footwear, and accessories. The right approach depends on factors such as expected future demand, remaining inventory value, storage costs, brand positioning, and the markets where the goods are sold.
As a result, end-of-season inventory requires planning. Suppliers can consider several approaches to managing excess inventory, including:
- Extending or reordering a product.
- Packing and holding inventory for a later selling period.
- Marking down and clearing inventory.
- Selling through an owned outlet.
- Selling through off-price retailers.
- Donating, reselling, or recycling inventory.
- Destroying inventory where legally permitted.
Each option has different implications for recovery, time to sell, brand exposure, operational requirements, and regulatory compliance.
Related Reading: Fashion Supply Chain Traceability, and Why Documentation Matters More Than Ever
What Happens to Unsold Apparel After a Season?
There is no single approach for every product, as there are different strategies depending on the item type. A basic item that sells consistently may have an opportunity to sell in a future season, while a trend-driven style may lose much of its value once the original season ends.
Suppliers can compare potential exit channels using several factors:
Channel | Typical recovery | Speed to cash | Brand exposure | Operational considerations |
Reorder or extend | High | Fast | Low | Relatively low |
Carryover | High | Slow | Low | Storage and planning |
Pack-and-hold | Moderate to high | Slow | Low | Storage and inventory tracking |
Markdown or clearance | Moderate | Fast | Moderate | Relatively low |
Owned outlet | Moderate | Moderate | Low to moderate | Additional channel management |
Off-price | Low to moderate | Fast | Moderate to high | New trading partner and requirements |
Donation, resale, or recycling | Low | Moderate | Low | Channel and logistics considerations |
Destruction | None | N/A | Potentially high | Increasingly restricted |
These categories aren’t mutually exclusive, as a supplier might use different approaches for different products, sizes, locations, or quantities within the same season.
How Do Brands Choose Between Reorder, Carryover, and Exit?
One of the first considerations is whether a product is seasonal or core.
Seasonal products generally have a limited selling window. Demand may decline once the season or trend has passed. Core products, by contrast, are intended to remain relevant across multiple selling periods.
This distinction can influence what happens to remaining inventory. A core style may be a candidate for carryover or pack-and-hold, while a highly seasonal item may require a markdown, outlet, off-price, resale, donation, or another exit strategy.
Timing is an important part of your choice. Suppliers can establish sell-through checkpoints during the season to determine whether a product is performing as expected. These checkpoints can inform decisions about whether to continue ordering, carry the product forward, or begin planning an exit.
For example, a supplier might review sell-through at several points during the season instead of waiting until the season is nearly over. Earlier decisions generally leave more options available because inventory can still move through the original channel or be redirected while there is time to plan another approach.
Store- and stock-keeping unit (SKU)-level sales and inventory information can help with these decisions. The level and format of information available to suppliers varies by retailer and trading relationship.
What Is Pack-and-Hold?
Pack-and-hold is the practice of storing inventory so it can be sold during a future season instead of marking it down immediately.
The approach is generally more appropriate for products expected to remain relevant, like timeless classics, basic apparel, established styles, and products with consistent historical demand. These types of items tend to be better candidates than highly trend-driven merchandise.
Retailers have used the strategy in different ways. For example, Gap has discussed holding selected basic items for future selling periods, while Kohl’s has packed away certain holiday merchandise for a subsequent holiday season. Other retailers have used similar approaches for products with strong sell-through and a clear place in a future assortment.
Pack-and-hold also creates costs and risks. Inventory must be stored, tracked, and maintained, risking changing demand or a bad fit with the following year’s assortment. The decision generally depends on whether the expected future value of the inventory justifies the cost and risk of holding it.
How Does the Off-Price Channel Work?
Off-price retailers are one potential channel for excess or discontinued inventory. These retailers purchase merchandise at reduced prices and generally sell it below traditional full-price retail.
Off-price businesses may acquire inventory from several sources, including canceled orders, excess production, closeouts, and other merchandise that a supplier or retailer doesn’t plan to sell through its original channel.
The channel can provide a relatively quick way to move inventory, but it involves trade-offs. Suppliers generally receive less than they would through a full-price sale, and merchandise may appear alongside products from other brands and retailers.
Selling to a new trading partner can also create operational requirements. These may include new agreements, electronic data interchange (EDI) connections, routing requirements, labeling, and compliance processes.
Why Is Inventory Destruction Restricted?
The treatment of unsold inventory has changed in recent years.
In 2018, Burberry disclosed that it had destroyed £28.6 million in finished goods during the year. The disclosure generated public criticism, and the company subsequently committed to ending the practice and expanding approaches such as reuse, repair, donation, and recycling.
France’s AGEC law later established restrictions on the destruction of unsold goods. The European Union has since introduced broader requirements through the Ecodesign for Sustainable Products Regulation.
Under the ESPR, large companies have been prohibited from destroying unsold apparel, clothing accessories, and footwear as of July 19, 2026. Medium-sized companies will be subject to the prohibition beginning in 2030.
The regulation’s definition of destruction includes incineration and shredding unsold garments solely for fiber recovery. Reuse, donation, repair, and remanufacturing remain possible alternatives, subject to applicable requirements.
The regulation also introduces disclosure requirements. Beginning in February 2027, large companies will be required to disclose information about unsold products they discard and the reasons for doing so.
Specific requirements depend on factors such as company size, product category, and market. Suppliers should consult qualified legal or compliance professionals when determining whether requirements apply to their business.
This article is for general informational purposes only and does not constitute legal or compliance advice. Brands should consult qualified counsel or compliance specialists to determine how the ESPR, France’s AGEC law, or other applicable regulations affect their products and markets.
How Can Brands Build an End-of-Life Strategy?
A formal planning department isn’t required to establish a repeatable process. Businesses can start by answering a few practical questions before and during each season.
- Classify products before the season starts. Identify which styles are seasonal and which are expected to remain relevant across multiple selling periods.
- Establish sell-through checkpoints. Set specific points during the season to review performance and decide whether to reorder, carry over, or exit a product.
- Compare multiple exit options. Consider expected recovery, timing, operational requirements, and brand implications for options such as markdowns, outlets, off-price, carryover, resale, or donation.
- Review applicable regulations. Determine which rules apply based on where the business operates and sells, its size, and the products involved.
Considering these questions early can give suppliers more options. Waiting until the end of a season can limit available channels and reduce the opportunity to choose the most appropriate use for remaining inventory.
Related Reading: FTC Labeling Requirements: A Guide for Suppliers
Frequently Asked Questions
What Is the Difference Between Carryover and Pack-and-Hold Inventory?
Carryover refers to core product that is intentionally sold across multiple seasons. Pack-and-hold is a more specific inventory-management decision in which merchandise is stored for a future selling period instead of being marked down or otherwise exited at the end of the current season.
Is Off-Price Retail a Good Option for Excess Apparel Inventory?
Off-price can be an appropriate channel for some excess inventory, particularly when a supplier needs to move merchandise relatively quickly. However, it generally involves lower recovery than selling through a full-price channel and can have different brand and operational implications.
Suppliers should compare the economics with other available options before making a decision.
What Counts as “Destruction” Under the EU’s New Rules?
Under the ESPR, destruction can include more than incineration. The rules also cover certain forms of physical alteration, including shredding unsold garments solely for fiber recovery.
Reuse, donation, repair, and remanufacturing remain potential alternatives, subject to applicable requirements.
Where to Go From Here
Managing end-of-season inventory requires suppliers to balance expected demand, inventory value, timing, storage costs, available sales channels, and regulatory requirements.
A core style with consistent demand may be appropriate for carryover or pack-and-hold, while a seasonal or trend-driven product may require a different approach. Establishing decision points before inventory becomes excess gives suppliers more time to evaluate their options and understand the potential consequences of each one.
For more on managing inventory across the retail season, check out The Supply Chain Source.