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The fashion industry had a unique concern about the impact of tariffs. Continued uncertainty has pushed Urban Outfitters to move up shipments of its fall product, putting it at an increased risk of miscalculating fall fashion trends. Apparel retailers must strike a balance in giving themselves time to predict new styles, while also shipping inventory early enough to sell it all to consumers, Northeastern University professor Shawn Bhimani told Fortune.
President Donald Trump’s tariffs may mean that your new autumn sweaters may already be so last year.
The U.S.’s steep levies on clothing production giants like China and India is forcing retailers like Urban Outfitters to make supply-chain changes that may result in stocking inventories that don’t fully align with seasonal fashion trends.
Urban Outfitters chief financial officer Melanie Marein-Efron said the Philadelphia-based apparel retailer will likely have to pull forward shipments of its products for autumn as result of tariff concerns.
“While our teams continue to focus on increasing inventory turns, the uncertainty around tariffs means we are likely to bring in fall product a bit earlier,” Marein-Efron told investors on Wednesday following its first-quarter earnings report.
She added that because of tariffs, as well as to plan for future supply-chain disruptions, the retailer needed to plan to pull forward its fall inventory, which is less sensitive to changing fashion trends.
In order to save on costs, the company will shift its shipping method from air to sea, which will add about 30 days to the products’ delivery time. While Urban Outfitters may secure its fall inventory, the earlier shipment dates means it won’t have as much time to predict what styles consumers will want once the leaves start to change colors and temperatures cool.
“There is always a risk as you go out in time that the fashion might not be as accurate as we would like it to be,” Urban Outfitters CEO Richard Hayne told investors.
As Urban Outfitters grapples with the ramifications of tariffs, so too do other retailers having to scramble to rearrange supply chains, as well as pull forward shipments of goods to dodge the impact of the levies. Logistics professionals warn whipsaw tariff policies are encouraging stockpiling behaviors, which may result in headaches down the line for retailers like shortages or inventory pile-ups.
URBN—the parent company of Urban Outfitters, as well as Anthropologie, Free People, and Nuuly—reported strong first-quarter earnings, posting 11% sales growth in the first quarter and a 5% increase in same-stores sales. Its quarterly revenue of $1.33 billion exceeded the $1.29 billion analysts expected.