Swelling Retail Inventories Have Analysts Concerned for Second Half

As retailers fret over where they source goods to avoid the impact of the ongoing trade war with China, retail analysts are expressing concern that inventory levels may be creeping up for some companies, which could hurt margins in the third quarter if product isn’t moved this summer. The solution? Continue to focus on sourcing goods from countries other than China while being disciplined in regard to the cadence of markdown activity over the next few months. One bright spot is the resale and secondary market, which continues to grow and is likely more resistant to global, macroeconomic issues. See related story: Retailer Sourcing Dilemma: Leaving China Is Complicated Antony Karabus, chief executive officer of retail consulting firm HRC Advisory, said his firm is seeing “a number of clients increase their inventory purchases for holiday 2019 in order to get ahead of the 2020 Chinese tariffs.” He said while he understands “the desire to avoid the potentially severe tariff impacts on cost of goods, this increase in purchase value arguably replaces a cost risk with a major inventory and margin/markdown risk as these retailers will be buying more than they need for the 2019 holiday season.” Karabus said the only way to clear the

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