Why warm weather has screwed over retailers.

Why This Warm Weather Is Terrible for Retailers—and Maybe Great for Bargains

Why This Warm Weather Is Terrible for Retailers—and Maybe Great for Bargains

Moneybox
A blog about business and economics.
Dec. 15 2015 4:32 PM

Why This Warm Weather Is Terrible for Retailers—and Maybe Great for Bargains

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But it means you can expect huge discounts on winter coats and sweaters.

Photo by Sean Gallup/Getty Images

Unseasonably warm winter weather is usually cause for celebration. But for retailers that rely on chilly temperatures to sell cold-weather clothing, this year’s record-breaking heatwave is a nightmare. Stockpiles of coats and sweaters they expected to sell lie dormant as Christmas nears closer.

Planalytics, a weather consulting firm that helps companies with climate-related business concerns, used retail data from the U.S. Census Bureau to estimate that U.S. stores lost around $185 million in November because of the warm weather. And it’s not getting better: For the week of Dec. 12, winter apparel sales were down 30 percent in Boston; New York; Philadelphia; Nashville, Tennessee; Chicago; and Atlanta, as Quartz points out.

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That’s good news for bargain-hunting consumers, who can look forward to big discounts on outerwear as stores try to purge their accumulating inventory. Bill Kirk, the CEO of Weather Trends International, another climate consultancy, told BuzzFeed: “The after-Christmas sales are going to be ginormous. If you saw 50 percent off sales last year after Christmas, you might expect 75 percent-off next year. It will be exponentially better because there’s so much inventory to clear.”

While it would be nice if companies could store their leftover winter apparel until next year (when it will hopefully be much colder), the carrying cost of letting items sit in storage wouldn’t be worth it. That’s why some stores will have to mark products at nearly 80 percent off to salvage what they can from their winter losses, Kirk says.

So look out for those massive discounts, which are already starting to show up at stores like Banana Republic and Macy’s. And since Weather Trends is predicting a very cold spring, you still might want to stock up on the warm clothes you haven’t needed in December.