- Victoria’s Secret struggles with supply chain issues.
- Its CEO said 45% of its inventory for the fall season has been delayed.
- He currently has product stuck on 100 vessels that cannot dock and unload.
Victoria’s Secret is feeling the pressure of the disruption of the global supply chain.
In a call to investors to discuss third quarter results Thursday, the company’s CEO Martin Waters said 45% of inventory ordered for the fall season was delayed due to chain issues. supply.
Increased transportation costs and delays in product arrivals will cost the company a total of $ 150 million in the third and fourth quarters, Waters said. He added that the company is now taking steps to cancel orders that arrive too late for the holidays or import them by air to avoid shipping delays.
The company said the long lead times and delays also prevent it from ordering more stock that sells well, thereby missing out on sales opportunities.
Victoria’s Secret is one of the many retailers affected by the outage. An increase in consumer demand since the end of 2020, combined with labor shortages, has created delays and congestion at seaports around the world, causing massive disruption of supply chains. Now, mountains of items destined for stores for the holiday season are trapped in containers lying on port docks or on ships awaiting mooring.
Waters said the company has product stuck on 100 ships that currently cannot dock and unload.
And he’s not minimizing the impact these delays will have on his business. âI don’t think scarcity equals faster selling, we don’t see that happening at all,â he said. â25% of our pajamas are late, which is clearly bad for business. “
Victoria’s Secret has canceled 10 million units of inventory that would arrive too late for the holiday season. He still expects to head into next year with more proceeds than usual, which just might end up being shelved.
âWe just have to keep our cool and let the game play out,â Waters said, adding that he expects the delays to last until 2022.
Retail experts expect discounts and deals to be plentiful in stores early next year as retailers seek to move holiday inventory that has arrived too late.
Discount stores such as TJ Maxx and Ross are expected to be the main beneficiaries. These stores thrive when the supply chain is disrupted – when the product is in the wrong place at the wrong time – as it gives them more opportunities to purchase inventory.