Off-price retail and surplus inventory management in circular fashion

In recent times, the fashion industry has faced significant challenges in the management of its surplus inventory. To solve this problem, many brands have transitioned to circular economy strategies like recycling, resale and take-back programmes aimed at maintaining sustainable practices. However, these methods often encounter a number of systemic barriers that limit their large-scale implementation. This paper therefore aims to identify practical pathways for improving sustainable surplus inventory management within circular fashion mechanisms through off-price retail. The paper adopted an industry-based perspective approach and combined insights from the existing literature with the author’s personal insights derived from years of experience in the field. The paper finds that off-price retail can extend the product life of fashion items and assist brands with the reduction in fashion waste by distributing usable surplus apparel through secondary-market channels. For clarity, the argument advanced in this paper is limited to genuine surplus inventory, which is already-manufactured merchandise that becomes excess because of factors such as cancelled orders, production overruns, end-of-season stock, contingency quantities, or weaker-than-expected primary-market demand. It does not extend to merchandise intentionally designed or manufactured for sale through off-price or outlet channels, which represents planned production rather than surplus redistribution. However, the sustainability benefits of this model depend on its ability to complement broader efforts that address overproduction, improve forecasting and mitigate rebound effects.