What:  Poor inventory decisions and shifting consumer behavior are putting US retailers at risk according to UBS.

Why it is important:  Sales might take place earlier and be more brutal than expected for this season in the US. The inventory level seen by IADS in the Seattle Nordstrom store was already a worrying sight early June 2022.

According to a recent note from UBS, department stores such as Nordstrom, Macy’s, Kohl’s or Dillard’s are at risk of carrying an unprecedented level of excess inventory, due to poorly made decisions at the moment when inventory was ordered for 2022, and a shifting behaviour from customers asking for more dressy styles and dropping the casual look. As a consequence, retailers carry too much stock on poorly-performing categories. UBS expects this to also affect off-price retailers, such as TJX or Burlington stores.

US department stores at risk of an unprecedented inventory excess