{{Docteur Sami SBOUI}}
_ A distinction is made between excess stock – during the selling season – and unsold stock that remains at the end of the season. According to our studies, unsold stock varies between 33 and 50 %, and the average figure is generally high for top-of-the-range products. The retail brands have difficulty in managing this unsold stock and they endeavour to optimise the de-stocking process. It is less a problem of quantity than of uniformity of stock, because during the sales period, a varied range of products has to be offered.



{{Jean-Loup BESQUENT}}
_ We do not own the brands, and so we pay royalties on unsold goods. In a certain way, these unsold goods are a « necessary evil », a result of production quotas – it costs the brand just as much to produce 1500 tee-shirts in Asia as 2000. This is why the amount of unsold stock is tending to increase.



{{Alessandro BEDESCHI}}
_ Unsold goods is a major problem for the fashion retail sector and varies from country to country. Distinction should be made on how specialised retail chains and independent retailers deal with the issue of sold goods. Key factors for success chains are their perfect integration in their supply chain and their good logistics system. They also can move their stocks through distribution systems and know their consumer profile. For independent multi brand retailers, the only solution to limit stocks is to cooperate with their suppliers by enhancing the communication and sharing information on the sell out of the collections; from ordering to the final sell out. In some countries (Scandinavian countries, the Netherlands), there are good practices of cooperation between retailers and suppliers whilst in some other countries there is still a long way to go.
It is a matter of mentality, product, individual companies, and size of the companies.
Consumers tend to buy more during the sales promotions which is one of the reasons retailers have stocks.



{{Jean-Loup BESQUENT}}
_ It is important for brands to ensure upstream control of their goods sales channels in order to maintain their image. 95 % of our goods are sold in factory outlets, which is an ideal channel to provide control and profitability. The rest is sold on Internet and via discount stores. We do not take back unsold stock from retailers after the sales, apart from in exceptional cases.



{{Docteur Sami SBOUI}}
_ Of all our de-stock possibilities (factory outlets, excess stock outlets, export and de-selection), export is the preferred method, because it obviates the need for cut-price selling.



{{Bruno ROGOWSKI}}
_ That being said, there are two limits for export – if the brand does not have a strong image in the country in question, it will never be able to sell the products; and if, however, the brand has a strong image, it must defend this it in that country.



{{Docteur Sami SBOUI}}
_ Lesser known brands end up in the used clothing stores in Africa. Well-known brands, such as Zara are also very well known abroad.



{{Alessandro BEDESCHI}}
_ I don’t know Zara well enough to speak about the company. Each brand has its specific market strategy, which needs to penetrate the market whilst keeping a strong brand image. How they penetrate markets depends on several factors: on the distribution strategy, on the expansion plans, on consumer behaviour, and on how strong or well known the brand is. Stock is sold during sales promotions, unsold stock is sent to wholesalers or is destroyed.



{{Bruno ROGOWSKI}}
_ How do other sectors of industry manage unsold stock?



{{Docteur Sami SBOUI}}
_ Unsold stock is a fact of life in all economic sectors (Bordeaux wine, newspapers, etc.). Walt Disney, for example, destroys lots of CD-ROMs. Airbus, on the other hand, has no problem of unsold stock, but has to cope with electronic component obsolescence. It is important to bet on the « right unsold stock ».



{{Bruno ROGOWSKI}}
_ How is the price of unsold stock set?



{{Jean-Loup BESQUENT}}
_ Consumers are in the know and understand the factory outlet mechanism and the prices of unsold stock.



{{Docteur Sami SBOUI}}
_ We want to set up a dynamic price system for transport.



{{Alessandro BEDESCHI}}
_ Consumers are more and more complicated and have an incredible choice so they can look at quality price ratio. From a brand perspective, price is a marketing tool. Concerning the recycling of textiles and greater awareness of the environment, there is more attention given to greener products and, hopefully, in the near future, consumers will be more keen on paying for these products. A good price, from a company perspective, is when the consumer pays.

{{ {Discussions with the floor} }}

{{Pierre DESRUES}} (CCI – Chamber of Commerce, Essonne)
_ Retailers’ difficulty in selling their excess stock is increasing with the development of specific excess stock distribution channels; it even raises the issue of their survival.



{{Alessandro BEDESCHI}}
_ For small independent retailers, overstock is a matter of survival; therefore the cooperation between small retailers and suppliers is important. Small retailers’ main partners are the European industries, if the suppliers could agree to take back the unsold goods, retailers could lower their margins. Thus retailers would survive, be more competitive and suppliers would still have clients.



{{Alain SALZMAN}} (Président de Marques Avenue)
_ Manufacturers should allow retailers to take advantage of the brand centres to sell their excess stock. This would enable retailers to take more risk, which would, in the long run, be to the advantage of the manufacturer.



{{Pierre DESRUES}} (CCI Essonne)
_ This is incompatible with the manufacturers’ approach – they have over-stocking problems and their attitude is that attack is the best form of defence.



{{Jean-Loup BESQUENT}}
_ It is not profitable to allow retailers to get rid of their stock in a factory outlet, because costs are too high for small stocks.



{{Docteur Sami SBOUI}}
_ Retailers have an interest in working with discounters, because, with the massive increase in collections, they have to release space and disburse money. De-stock management is just as important as procurement management.



{{Alessandro BEDESCHI}}
_ To be clear about the relation between factory outlets and retailers, it is understandable if a producer takes back the unsold goods of a retailer and sells those in a real factory outlet centre. The question is what is a real factory outlet centre and what have they become. Many producers create ad hoc productions for factory outlet centres, which is a distinct situation.



{{Yves MARY}} (Owner of a factory outlet centre at Cholet)
_ Do factory outlets satisfy the customer?



{{Docteur Sami SBOUI}}
_ A new consumer is emerging today, the « special offer-aholic », that is someone who is looking for a good deal. 70% of women only buy during the sales periods. Distributors should take into account this behaviour in their strategy. The discount race must not be developed to such an extent as to engender « cannibalism ».



{{Michel de SOUZA}} (President of a towns association near to Geneva)
_ We must find a modus vivendi that enables retailers as well as the major brands and distributors to be successful, without putting them into opposition.