At a time when margins are shrinking and uncertainty is growing, many companies in the fashion industry are choosing to slow down or cut projects deemed non-essential. All too often, this includes everything related to sustainability. However, today, adopting a sustainable model is no longer just a matter of image or an item on the Corporate Social Responsibility agenda: it is a practical tool to protect the business, reduce risks and improve efficiency throughout the entire value chain.
One of the most immediate – and often underestimated – tools is the smart management of unsold stock, through a strategy that allows surplus stock to be valorised through controlled secondary markets, rather than turning it into costs or waste. It is precisely in this area that at M&A Export we help companies recover value, maintain control of their brand, and improve their sustainability indicators.
Sustainability is an investment, not a cost
Major international players in the fashion industry are increasingly investing in innovative materials, textile recycling, supply chain traceability and circular economy. They are doing so not only for reputational reasons, but also because European regulations are becoming increasingly stringent, customers and investors are demanding transparency and accountability, and finally because reducing waste delivers immediate economic benefits.
Cutting sustainability investments in the short term may seem like a shortcut, but in the medium term it could lead to numerous critical issues:
- higher compliance costs,
- lower operational efficiency,
- loss of competitiveness,
- higher reputational risks.
Unsold, returned and defective stock as a strategic tool
Nevertheless, sustainability is not just about materials or innovation on a large scale. There is a far more everyday aspect that has a direct impact on the profit and loss account: unsold stock. With each new season, brands and retailers find themselves having to manage surplus stock, e-commerce returns and defective or mismatched garments.
Traditionally, these volumes generate costs and tie up capital. However, in a more advanced approach – already adopted by many companies – these stocks are considered a resource to be leveraged through well-defined processes and policies:
- selection and classification of goods,
- identification of the most suitable secondary markets,
- structured logistics management and distribution,
- control of positioning and brand protection.
The results include significant economic recovery from already manufactured products, reduction of waste and textile refuse, and improved performance in terms of circular economy.
The pillars to achieve a practical and sustainable path
To transform this vision into a practical path, it is useful to focus on some key elements that help to configure stock management as a truly strategic leveraging tool. Here are the 5 pillars that make this approach effective and sustainable.
1. Sustainability in figures
Sustainability must be translated into figures. In the case of stock management, it is possible to note immediate economic benefits, particularly in terms of:
Cost reduction
- Less warehouse space occupied
- Lower disposal costs
- Less capital tied up in unsold goods
Revenue generation
- Valorisation of unsold stock on secondary markets
- Economic recovery from products that would otherwise have no value
2. Quick return projects
Not all sustainability initiatives require years of development. Stock management can deliver results in a matter of months if organised correctly. This means defining clear internal policies and standardised selection processes, as well as carefully monitoring relevant metrics such as volumes, revenues and items spared from disposal.
3. Risks and opportunities
Postponing stock management means accepting warehouse saturation, rising logistics costs, greater regulatory risk and the possibility of goods ending up in unauthorised channels. By contrast, setting up a structured process from the outset reduces risk, frees up space and capital, and demonstrates a concrete commitment to efficiency and sustainability.
Furthermore, stock management protects brands from increasingly stringent regulations on textile waste and the destruction of unsold stock. It also ensures greater control over brand positioning, avoiding unauthorised or poorly transparent channels.
4. Brand reputation
Stock management is a reputational issue in its own right. Consumers, buyers and partners want transparency, traceability and concrete circular economy practices. A clear strategy for managing unsold stock is therefore also an opportunity for positive communication, as it makes sustainability visible and measurable.
Realistic planning
To make strategic decisions, it is useful to compare scenario A, involving unstructured management, which entails storage costs, disposal costs, reputational risk and non-compliance with regulations, with scenario B, involving structured stock management, which, on the contrary, offers:
- revenue recovery
- lower storage costs
- greater circularity
- full control of distribution channels
Conclusions
The recent news of Prada’s acquisition of Versace highlights how professional management of unsold stock is crucial to protect a brand, maintain control over sales channels and add value to products that would otherwise remain unused. In an increasingly complex and competitive market, it is essential to be able to count on a reliable and structured partner.
At M&A Export, we help fashion brands recover economic value, reduce waste and strengthen their reputation through an integrated approach: from selecting and classifying goods to relocating them to the most suitable secondary markets and providing comprehensive logistics management.
Stock management is not only a sustainability requirement, but a valuable opportunity that transforms daily challenges into strategic leverage tools for business growth. To find out what we can do for you, contact us now.
