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The Fashion Industry's Unsold Inventory Dilemma

Research
August 8, 2025
4
min read

The fashion industry is sitting on a mountain of waste - literally. Behind every shiny store and new product drops lies a sobering reality: millions of garments that never reach a customer. Unsold. Unworn. Unaccounted for.

We’re not only talking about a big business problem, it’s an environmental one too. With fashion’s carbon footprint equal to that of shipping and flights worldwide, the call for urgent action is louder than ever. Regulatory action is picking up. Consumer expectations are rising. And brands can no longer afford to ignore the compounding cost of unsold inventory.  Now, let’s unpack the issue and the solutions driving real change.

THE PROBLEM

The Root of the Problem Isn’t Just Overproduction, It’s Misinformed Production

The industry’s waste crisis isn’t simply about making too much, it’s about making the wrong products, in the wrong sizes, and failing to adjust when demand shifts.

Returned items, many of which are never resold, play a major role. And 70% of those returns? They come down to one thing: fit.

Each misfit means more shipping emissions, higher handling costs, and a greater chance the item ends up as waste. What starts as a sizing issue becomes a supply chain and sustainability problem.

What’s driving unsold inventory?

Industry estimates show that 20-30% of inventory goes unsold every season. That’s almost one in three garments ending up heavily discounted, incinerated, or sent to landfill.

Why?

1. Poor sizing and fit

When customers order clothes that don’t fit properly, they return them. But the problem is, many returned items aren’t in perfect condition or may be out of season by the time they come back, meaning brands can’t simply put them back on the shelf. Instead, these returns add to overstock, increasing storage costs and waste. Over time, unsold returned products pile up, forcing brands to discount heavily or even destroy inventory, creating environmental and financial losses.

2. Inaccurate demand forecasting  

Many brands still rely on historical sales data from previous seasons to decide what sizes and styles to produce. But customer preferences and body shapes are constantly changing and relying on outdated data means brands often miss the mark. This causes overproduction of less popular sizes or styles and shortages of in-demand items. The mismatch leads to excess inventory that sits unsold and lost sales where popular items run out quickly, disrupting cash flow and increasing waste.

3. Static size curves  

Traditional size charts are based on old standards that don’t reflect how people’s bodies are evolving today. Factors like shifting demographics, changing body shapes, and the impact of lifestyle trends mean some sizes are no longer accurate representations of the population. As a result, certain sizes remain unsold on shelves, while others fly off quickly. This imbalance leads to overstock of some sizes, stockouts of others, frustrated customers, and missed sales opportunities, undermining both customer satisfaction and inventory efficiency.

The impact goes beyond waste: every unsold piece accounts for the water, energy, labour, and carbon footprint embedded in a product that never gets worn.

THE IMPACT

Unsold & Unseen: The Real Impact of Fashion Waste

Unsold inventory is environmentally damaging at every step:

  • Production: It takes over 3,000 liters of water to make a single cotton shirt. Multiply that by millions of unsold units, and the resource waste is enormous.
  • Returns and logistics: Returned items generate up to 4x the emissions of a successful delivery. And many are reprocessed or destroyed.
  • Disposal: An estimated 92 million tonnes of textile waste is created globally each year. Landfilled clothing releases methane, microplastics, and toxic dyes into the environment.

Hence legislation is now catching up. The EU are already introducing bans and penalties on destroying unsold inventory. One thing is clear: the industry can no longer treat waste as a hidden cost. The brands that don’t address this issue at its core – how they size, produce and plan – will fall behind and it will cost them.  

Linen fabric

THE SOLUTION

Solving Waste Starts with Solving Fit

At SAIZ, we’ve always known that fit is more than a sizing problem. It’s a product problem, a planning problem, and a profitability problem.

That’s why our solutions aren’t just built for the checkout page. They’re designed to inform everything from design and demand forecasting to size curves, buying strategies, and merchandising.

By connecting real customer bodies to real product data, SAIZ empowers teams across the value chain - helping them create better-fitting products, plan smarter assortments, and meet demand more precisely. Because when fit is right from the start, waste doesn’t stand a chance.

Where SAIZ Makes a Difference: Insight Over Assumptions

SAIZ goes beyond surface-level sizing tools, giving brands the fit intelligence they need to design, plan, and sell with precision.

At checkout
Our size recommender reduces size-related returns before they happen. Smart size charts and nudges guide shoppers to the right size, even in complex categories. We account for intentional design choices (e.g. oversized vs. tailored) and individual fit preferences, making sure size advice aligns with real expectations.

After purchase
Our analytics suite reveals exactly where fit is going wrong: by product, category, and even specific sizes. Whether sleeves run too long or waistbands fit too tight, we pinpoint the issue so teams can fix it fast. You get clear, actionable data on what’s returning, why, and how to improve so the same mistakes don’t repeat season after season.

In planning
We deliver real insights into product fit and customer body data across regions, so you can size, grade, and stock globally based on true demand, not guesswork or outdated size curves.

In design
From grading adjustments to size curve optimization, our tools help product teams create garments that reflect real-world body diversity and fit expectations, right from the first sketch. This way, poor fit is caught early and never makes it to production.

The Way Forward

Fashion’s environmental impact is no longer a back-office concern, it’s a business risk. Fixing it means moving from guesswork to precision. And that starts with fit. Because when you get fit right, everything else starts to follow: lower returns, smarter production, less waste, and a more sustainable future for fashion.

Ready to tackle your inventory problem at the source?
Start with fit and stop waste before it happens. Book a call to see how SAIZ can help.

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