Primark seeks extra space to house £1.5bn in excess stock
As retailers grapple with the problem of surplus stock and how to store it, value retail giant Primark has appointed Savills to help it find space to store large amounts of stock from abroad that currently can’t be sold.
Primark is a rarity in modern fashion retail in that it doesn't sell its goods online, so all of the inventory it had accepted for the spring/summer season has been sitting in stores both in the UK and across Europe. Last month, it wrote-down the value of its clothing stock by £284 million and said it was losing sales of around £650 million a month.
Property Week said that the company is looking for up to 400,000 sq ft of warehouse space in the Midlands on a short-term lease as it has to find a temporary home for £1.5 billion worth of stock from overseas.
The owners of warehouse space are currently seeing a mini boom as large numbers of retailers find they have nowhere to store the stock that would normally have been sold by now. The fact that goods ordered before the lockdown are still arriving in the UK piles on further pressure.
It’s unclear how long many retailers looking for extra space will have to store the stock as some of what’s going into storage will be unsaleable immediately after the lockdown ends, even with heavy discounts. The likelihood is that some will be repurposed for the spring/summer 2021 season.
The latest move from Primark comes after the company had already reportedly rented up to 40% more warehouse space in reaction to unsold stock during the coronavirus crisis.
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