Last week I came across an article about the increase in unsold stock of H&M (iconic fast fashion chain store). Their unsold stocks rose 7% to $ 4.3 billion USD. Profits in the first quarter has decreased by 62% compared to the same period of 2017. It’s the first time in about fifteen years that the company presents such low figures. Is this the beginning of the end for this overconsumption business model?
Let’s be precise and intellectually honest. $ 4.3 billion (or SEK 34.9 billion Swedish Krona, Sweden’s currency) represents the value of the total amount of stock in the 4,743 stores and distribution centers owned by H&M. This is not just unsaleable clothing as the photo above might suggest.
Yes, H&M has dead stocks and many think the company burns some, but unfortunately there is no public record on that.
The end of an era?
Also, this article reports results from the first quarter of 2018. Since then, the reports of the 2nd and 3rd quarter have been published. The latest results are: 38.7 billion Swedish Krona in stock, a profit reduction of 29% and a total of 4,841 stores worldwide.
Hard to say if these changes mark the end of an era of apparel overconsumption. On the one hand, H&M may be on the decline, but there are many other chain stores that offer an equivalent business model.
Maybe H&M did not take the digital turning point of selling online fast enough as CEO Karl-Johan Persson tries to explain.
Perhaps a fairly large portion of the population is now aware of the environmental and ethical consequences of low-priced fashion. I like to believe it.
I can not help thinking that sooner or later saturation will be achieved. In a business model where there is always more novelties, more often, faster, more trends, more stocks, more consumption, more waste … There will inevitably be a time when everyone will already have enough too much clothes in their wardrobe. The price will have no importance, because we’ll think to ourselves: “Even if this garment is given to me, I don’t want it because I already have too much.”
Over the last 15 years, global garment production has doubled, according to a report by the Ellen MacArthur Foundation.
The global middle class is growing. Clothes are used less. Trends are changing faster. Can this orientation be maintained?
Of course not, from an environmental point of view. Resources are finite. Our tolerance for pollution is only allowed by our misunderstanding of the problem. When we’ll understand the true cost of cheap clothes we won’t want this to continue.
Even ignoring this last argument, one cannot conceive that there will always be more. It’s impossible to come up with new trends every day. People just do not have the time or the desire to shop all the time. We would be saturated, jaded, tired of it.
Has this saturation rate been achieved?