A Closer Look at Why 44% of Fashion Retailers End Each Season with Excess Stock

The global fashion industry produced between 2.5-5 billion items of excess stock in 2023, worth $70-140 billion in lost sales. With 44% of fashion retailers reporting excess inventory and markdowns affecting an average of 40% of fashion goods, the stakes for getting assortment planning right have never been higher.

Learn what assortment planning is, why it matters for fashion brands and how the right tools can turn it from a guessing game into a data-driven strategy.

Introduction

Every season starts the same way: fashion brands have to decide what they're going to sell, where it'll go and how much to make. Sounds simple enough, right? It's not. These calls can make or break your season. In practice, however, these decisions carry significant operational and financial risk for a fashion business.

In the first half of 2024, the average proportion of discounted fashion items in the US rose 5 percentage points year-over-year. Nike reported that markdowns affected 44% of its assortment on average in 2024, compared to just 19% in 2022. Meanwhile, inaccurate stock purchasing across sizes results in profit loss of up to 20% on average.

Get it wrong and you're stuck with racks of clothes nobody wants, your bestsellers vanishing before the season's half over and margins tanking because you're forced to discount just to move product. Get it right, though and everything flows, you can pivot when demand shifts, waste less and keep both customers and partners happy.

Planning for AW2026 is happening right now in most fashion businesses. The styles, quantities and regional splits being decided this quarter will either set brands up for a strong season or leave them scrambling with markdowns by October.

Here's the weird part: even though this matters so much, most fashion brands are still doing it the old way; gut feelings, messy spreadsheets and data that's all over the place. When trends can flip in a week and what sells in London tanks in Tokyo, that just doesn't work anymore. With the global fashion market valued at $1.84 trillion in 2025 and growing at a 4.1% CAGR, and when trends can flip in a week and what sells in London tanks in Tokyo, that just doesn't work anymore.

What is assortment planning?

Assortment planning is how you figure out your entire product lineup for a season; which styles, what sizes and colours, how many pieces and where you'll sell them. It's about making sure the right products reach the right places at the right time.

Think of it as the bridge between what your designers sketch and what actually lands in stores or on your website.

Basically, you're answering: What styles are going to carry this season? How much do we commit to safe bets versus new trends? Where does everything go? And does any of this actually hit our numbers?

Area	The Old Way (How it usually runs)	The Smart Way (How it should run)
Demand Forecasting	Based on gut feeling or last season's numbers, often outdated by the time decisions are made.	Driven by real-time order data from distributors and retailers, updated continuously across the chain.
Size & Color Decisions	Guessed based on general trends. Leads to wrong sizes or colors being produced and shipped.	Built from region-specific sales data and customer behaviour, fewer mismatches, fewer returns.
Inventory Depth	Over-ordered on safe styles, under-stocked on trend pieces. Ends up with dead inventory or stockouts.	Balanced intentionally, core styles get depth, trend styles get breadth, based on live demand signals.
Channel Planning	The same collection pushed across all channels with little thought. Wastes inventory where it doesn't sell.	Assortments tailored by channel and region, what works in flagship stores differs from what sells online.
Partner Coordination	Updates go out via email or WhatsApp. Distributors and retailers are often working on outdated info.	All partners see catalog changes, stock levels and order status in one place in real time.
Mid-Season Adjustments	Slow to react. By the time a trend is noticed, the season is already halfway through.	Assortment is treated as a living plan adjusted in real time as sales data and market signals come in.
Scaling to New Markets	Expansion creates chaos. New partners are onboarded manually and consistency across markets breaks down.	New regions and partners are added to a centralized system, pricing, policies and catalogs stay aligned.

Why assortment planning is so complex in fashion

Fashion brands that achieve inventory turnover ratios above 8x enjoy profit margins around 10% higher than their peers. However, the fashion industry currently operates at an average turnover ratio of 6.48 for apparel, with the industry producing excess inventory levels 20% higher than in 2019.

Brands that planned AW2025 a year ago without any room to adjust are feeling it now. The same mistake will happen with AW2026 if teams treat it as a static plan instead of something that evolves as the market does.Fashion isn't like selling soap or batteries.

Trends die overnight. Seasons blur together. What works in Milan doesn't necessarily work in Mumbai. And unlike, say, groceries where people need milk every week, fashion brands are juggling two completely different product types at once.

Trend pieces are the opposite, you want variety and speed, but if the trend flops, you're stuck with it.

Mess up that balance and you'll either be swimming in stock you can't move or watching your hottest items sell out in week two. And here's the kicker: assortment planning touches everything, your financial targets, demand forecasts, inventory, supply chain, all of it. When those systems don't connect, the whole thing falls apart.

The real problems that come from poor assortment planning

$70–140B worth of garments went unsold in 2023

The fashion industry produced an estimated 2.5 to 5 billion items of excess stock last year, underscoring how badly assortment decisions need to be tightened.

Source: Business of Fashion / McKinsey State of Fashion 2025

When brands phone it in on assortment planning or stick with outdated methods, the damage spreads everywhere. You end up with chronic overstocking and constant markdowns. Without solid demand data, you're ordering too much of what doesn't sell and slashing prices just to clear the racks. That kills your margins, sure, but it also makes your brand look cheap.

Meanwhile, your actual winners sell out faster than expected and customers who show up late find empty shelves. Frustrating them, losing the sale and basically handing business to your competitors.

Out-of-stock sizes ranks as the top complaint among shoppers. Lululemon attributed slower growth in the US in Q1 2024 in part to insufficient inventory and stock-outs in smaller women's sizes, demonstrating how this directly impacts revenue.

Then there's the geography problem. Something that flies off shelves in Berlin might collect dust in Bangkok. Without planning by location, you're wasting stock in one place while missing sales in another.

And your teams are stuck guessing. Without clean, real-time data, every decision takes forever. Buying, merchandising and supply chain all operate in silos and by the time someone spots the mistake, it's already snowballed.

How fashion brands should approach assortment planning

Good assortment planning starts with data, what sold before, what's selling now and what you expect to sell next.

Historical sales performance forms the foundation. Which styles did well? What sizes and colours moved? Where did things get stuck or mismatched last time around?

Market trends and demand forecasting layer on top of that. If you know where your customers are headed, you can get ahead of it instead of scrambling to catch up. That's where assortment planning stops being guesswork and starts being strategy.

Finally, think about channels and locations. Not everything belongs everywhere. Your flagship might carry the full range, while your online shop focuses on extended sizes or exclusive drops.

Tailor your assortment to the channel and region and you'll sell more while staying relevant.

The brands doing this well don't treat assortment planning like a once-a-season task. They treat it like a living thing, tweaking and adjusting as new data rolls in.

Where the supply chain fits into all of this

Assortment planning isn't just about what goes on the shelf. It shapes how your entire supply chain operates.

When you decide to double down on a bestseller, your suppliers need to know yesterday. Add a trendy piece to the lineup? Everyone; factories, distributors, retailers, needs to be on the same page about timing, quantities and pricing.

With 60% of large fashion companies now sourcing from 10 or more countries in 2025 (up from 45-55% in 2022-2023), and retail supply chain risk incidents more than doubling since 2020 with another 22% increase between 2024 and 2025, coordinated assortment planning has become critical for managing complexity.

If that info's buried in emails and spreadsheets across five different systems, your supply chain's toast. Orders get delayed. Stock lands in the wrong place. And by the time you notice, you've already lost time and money.

This is where centralized digital systems become critical to execution. A B2B portal puts your brand, distributors and retail partners all in one spot, so everyone can see what's happening and move fast.

How a B2B portal supports better assortment planning

A B2B portal won't do your thinking for you, but it gives you the structure and data to actually execute your plan. 

With three out of four fashion brands already relying on dedicated B2B software for wholesale processes, and more than 60% of B2B buyers preferring a rep-free digital experience, B2B portals have become essential infrastructure rather than optional technology.

You get real-time order and inventory data all in one spot. No more chasing down updates from ten different partners to see what's moving where. Your forecasting gets sharper. Restocking happens faster.

Your catalog stays centralized, so everyone's looking at the same info. Change an assortment, add a style, update a size range; everyone sees it instantly. No outdated information, no miscommunication.

Scalable rollouts become possible. New markets, new partners, your assortment plan rolls out consistently without the usual mess.

The business impact is measurable: Digitization replaces time-consuming tasks like managing spreadsheets and endless email chains. Automated processes reduce delays and errors in wholesale transactions, enabling scaling operations without adding significant costs.

This efficiency enables both productivity improvements and higher satisfaction for industry players.

With that kind of visibility, assortment planning becomes a repeatable system instead of a scramble.

Where Qartsolutions fits in

At Qartsolutions, we know assortment planning only works when your supply chain's actually aligned. Our B2B portal gives fashion brands real-time visibility, centralized catalogs and seamless coordination with partners so you can execute your plan without the friction.

Track what's selling across regions. Roll out collections consistently. All in one platform. Less guesswork, smarter planning, faster execution.

The bigger picture

The brands starting to sketch out AW2026 aren't relying on gut feel alone, they're analyzing multi-season trends, tracking which styles have staying power and looking at regional performance patterns to make smarter early calls. Assortment planning is one of the biggest calls you make every season. It shapes what customers see, what your supply chain delivers and how your business performs.

The evidence is clear: Brands with higher inventory turnover have successfully reduced markdowns by about 15%. Companies achieving turnover ratios above 8x enjoy margins around 10% higher than peers. For minimum markdown percentage, fashion retailers should aim for 18-20% but not higher than 25% to maintain healthy profit.

Brands that treat it like a strategy backed by real data, tight supply chain coordination and the right tools don't just avoid expensive mistakes. They turn it into an advantage that keeps them ahead, season after season.

Read more: https://www.qartsolutions.com/post/fashion-week-dates-2026-your-complete-global-calendar