Why fashion wholesale is being rewritten around inventory control

Fashion wholesale has long operated on a model of deferred risk where brands booked seasonal orders, shipped inventory, and waited weeks or months for payment while retailers carried the burden of sell-through. But that model is increasingly under strain.

Retail instability, compressed buying cycles, replenishment-driven ordering, and growing pressure on inventory efficiency have fundamentally changed how wholesale operates.

Wholesale is not just a sales channel anymore; it is shaped by inventory control, credit exposure, allocation discipline, and operational governance. Brands that succeed today are those that treat stock as a strategic asset, maintain tighter control over distribution, and build systems capable of managing risk across wholesale, DTC, and retail simultaneously.

Why the traditional fashion wholesale model is breaking

Risk has been, and perhaps always will be, inherent to wholesale. Brands traditionally booked seasonal orders, shipped products, and waited anywhere between 30 and 90 days for payment.

Retailers carried the markdown risk, even if it had a habit of flowing back upstream through chargebacks, late payments, return authorisations, and unpaid stock sitting on the floor.

It worked for a time because the model served both sides well enough. Wholesale brands benefited from increased reach without the cost of owned stores, while retailers could receive assortment without committing capital upfront. It was mutually beneficial.

Then, wholesale customers began to favour stock replenishment orders rather than presale orders, effectively putting the risk back onto the wholesaler. This isn’t new information, but it did hammer home a key point: It doesn’t matter who assumes the risk. It exists and always will.

What matters more is the industry coming together to minimise risk as much as possible.

The stories surrounding Saks Global, SSENSE and Matches once again prove this to be true.

In January 2026, Saks Global’s Chapter 11 filing – with a reported funded debt of around $3.4 billion and a vendor community that had already halted shipments – made the ins and outs of wholesale known to the world in a way quarterly earnings calls never did.

The debacle has reshaped how wholesale is viewed by the wider world; it is no longer a symbiotic relationship but an unsecured loan extended by hundreds of brands, renewed every season, with recovery prospects that do little to reassure anyone.

Saks Global is not the full picture, but it is the clearest and most recent data point in a pattern that has been building for years. Matches, for instance, collapsed in 2024 while owing roughly £50 million to brands and suppliers – something that still shapes how independent labels act today.

SSENSE also entered a court-supervised restructuring process in early 2026, and while it was bought out in mid-February, brands are still sitting with unresolved balances from prior seasons.

How fashion wholesale became a channel defined by risk and control

There is a temptation to think this sequence is merely a cycle that will normalise once consumer confidence steadies, inventory levels correct, and macroeconomic factors subside.

No one should think this.

Wholesale is undergoing a structural metamorphosis that is necessary for long-term survival. It isn’t “just” a sales channel anymore, but a credit and risk management channel too.

Payment terms, factoring arrangements, exposure caps, and the difference between what’s already been shipped and what you’re willing to send next are no longer back-office details; they’re a necessary part of commercial strategy.

Brands that shipped on net-90 terms to Saks were, for all intents and purposes, financing the retailer’s working capital. Now, some are insisting on net-30 payment terms as a minimum.

The balance likely lies somewhere in the middle, but it is one example of how wholesalers are reacting to the strain in their business model. Others include only shipping in stages, releasing additional product after payment is received, or even asking for payment up front.

There is also a shift playing out in the role of multi-brand retail. Retailers who are growing in spite of the choppy market conditions are doing so in a fundamentally different way.

Mytheresa, for example, has demonstrated that a focused, high-margin, curation-led approach can spur real growth. Contrast that with the broad-assortment, heavy-markdown dynamics that have characterised the fall of many legacy retailers, and it’s almost night and day.

Curation doesn’t need to be a merchandising preference. It can be a way to tighten operations and drive profitability. Fewer SKUs, higher average transaction values, fewer promos, and brands that a business can support are the ingredients of a sustainable multi-brand operation.

(The principle applies outside wholesale, too. Bjørn Gulden notably scaled back on excess SKUs at Adidas and leaned into popular models like Sambas and Gazelles to improve margins.)

For some brands, the logic of control taken to its extreme means significantly shrinking wholesale.

Kering’s February 2026 results show that Gucci’s directly operated retail network now accounts for 92% of its sales, with wholesale down 34% in its 2025 figures.

Prada Group’s FY25 figures point in a similar direction, with retail sales sat at €5.1 billion compared to only €471 million in wholesale sales. Prada Group’s management also noted plans to reduce Versace’s reliance on outlets and discounts, reinforcing its move toward more controlled, full-price distribution.

Neither Gucci nor Prada Group’s pullback from wholesale means the channel is bad.

The moves were likely made to protect pricing power, presentation, and brand perception while luxury continues its broader recalibration. It does, however, show that wholesale is a strategic channel that must be carefully considered in line with a brand’s wider strategy.

JOOR’s longitudinal data on wholesale order cycles also shows that the trend of buyers purchasing closer to demand and preordering less stock from their suppliers continues to grow.

The data suggests that the average time from order placement to shipment went from 263 days in 2019 to just 102 days in 2024. What this crucially means is that buyers view wholesalers more as a replenishment mechanism than a seasonal booking catalogue.

Pair the above challenges with the EU’s upcoming ban on the destruction of unsold goods – effective for large companies from July 2026 – and the structural pressures on inventory discipline tighten even further.

The once-tried-and-true release valves (end-of-season liquidation, outlet channels, and markdowns) are progressively being constrained. Better pre-season planning and tighter in-season replenishment are all but necessities, but at least these are both methods to help wholesalers regain control and mitigate risk.

What successful fashion wholesale brands are doing differently

Healthy wholesale brands right now are those that treat their stock as a governed portfolio with the systems in place to execute that governance at scale, not necessarily those with momentum or heritage.

This can be seen in the likes of On. The brand’s wholesale net sales reached CHF 383 million in Q4 2025, up 23% year on year. It also generated a similar level of revenue through DTC at CHF 361 million. On is clearly not retreating from wholesale. Its 2025 results point to strong execution across wholesale and DTC, with premium positioning maintained across both.

Elsewhere, Adidas reported strong growth across channels in 2025, with wholesale still accounting for 60% of total net sales. Ralph Lauren also posted double-digit wholesale growth in both North America and Europe in its February 2026 results. This was supported by stronger-than-expected reorder activity, a sign that wholesale demand held better than expected.

Deckers, whose HOKA brand is one of the better-named examples of controlled distribution, framed its strategy explicitly as balanced growth in DTC and wholesale, with full-price selling listed as a key driver.

New Balance provides another useful reference point. The brand reported increased revenues of 19% in 2025, with wholesale still forming a significant part of the business. It is, however, continuing to expand its own retail footprint, showing that both channels must be balanced.

These brands show that, at scale and with serious channel dependency, balance is not something to simply strive for, but a key operational discipline that has to be actively managed.

What the industry is seeing across top wholesale channels is that growth is the result of a deliberate decision to treat inventory as something to be allocated and not just sold. It is also about controlling which accounts receive which product, at what time, and on terms that prevent channel cannibalisation.

Why selective distribution is important in fashion wholesale

For brands sitting at a different scale and growth stage, the mechanics are slightly different, but the overall logic is the same. Represent built its wholesale presence around a short list of strategic partners – Selfridges, END., Harvey Nichols, and Flannels – while keeping DTC as its primary revenue driver.

Each of the partnerships carries a specific job, either to grow reach in an area where the brand’s direct presence is limited, or a brand adjacency that reinforces a position it wants to own.

Cole Buxton follows the same playbook and deliberately limits its wholesale footprint with select partners like END., Selfridges, Flannels and Harrods, while keeping DTC as its main channel to control distribution, protect pricing power, and preserve the brand’s image.

Selective wholesale only works if the brand can back it up with operational consistency, though, and the list of partners ultimately means nothing if the stock isn’t there when it needs to be.

Palace’s Spring 2026 Schott collaboration, released through Dover Street Market, provides a concrete example of what Represent and Cole Buxton achieve through their select partnerships. It is a wholesale touchpoint comprising one partner, one capsule, and one moment. The brand effectively taps into wholesale the same way a magazine uses a cover story, not as a distribution channel but as a statement.

The partner is chosen because of what it says, not what it sells.

Aimé Leon Dore once stepped away from wholesale partnerships to regain full control over the brand’s perception. It has since reintroduced limited partnerships, such as with END., to grow reach, but it uses them sparingly to reinforce the brand’s identity.

With that said, wholesale does not need to be the enemy of brand perception. Fear of God ESSENTIALS, for example, has a much heavier reliance on wholesale, but its use of drops and controlled releases aligns with the broader streetwear model. This keeps demand consistently high at retail.

This is a tactic most streetwear brands use to protect their brand.

Take Supreme and its extremely controlled distribution. While recent coverage suggests the brand is regaining some of its earlier cultural momentum, its approach to wholesale remains highly selective. Its limited wholesale presence again functions as a way to reinforce scarcity and brand positioning.

This doesn’t mean brands have to reduce volume to maintain control though.

Carhartt WIP’s wholesale distribution is intentionally selective and structured, allowing partners to engage with the brand at specific moments rather than across the entire range. The result is a more controlled approach to volume, where distribution is managed without diluting the brand.

The specific mechanism may differ from what a Supreme or Palace might do, but the underlying logic, that being distribution as a deliberate act, is identical.

Inventory control and operational execution define wholesale success

It is a lot easier to describe what good wholesale practices look like than it is to build or sustain them. Often, the gap between the wholesale strategy a brand wants to execute and the wholesale operations it has to actually execute it is where most problems live.

One fundamental need is true insight into actual inventory. Not stock on hand per se, but available-to-promise, a number that nets out existing commitments, ringfenced allocations, and in-transit inventory before it tells a partner what they can have and when.

Brands that overpromise availability – whether from optimistic ATP logic or commercial pressure to confirm orders – are typically the ones that damage relationships, incur penalties, and lose accounts when those promises cannot be fulfilled.

Inventory ringfencing is another capability that separates the winners from the rest. The ability to reserve stock by channel, region, account, or order type (and enforce those rules consistently as the season progresses) is what allows brands to honour DTC commitments without cannibalising wholesale allocations and ensure key accounts are serviced first.

Every brand wants to operate with ringfencing, but many still rely on old processes and tools like spreadsheets and word of mouth, things that make allocation hard to manage with the volume fashion handles. For ringfencing to be enforced properly and consistently, brands need rule-based logic built into their systems and processes to execute them systematically.

We’ve already seen that many wholesale customers are leaning into replenishment orders rather than preorders. As the industry continues to trend this way, wholesalers must develop stronger replenishment capabilities to go hand in hand with their ATP and ringfencing.

The ability to monitor customer sell-through, trigger reorder suggestions, and fulfil against structured min/max policies (especially as buying cycles compress and in-season orders grow as a share of total wholesale volume) is increasingly what keeps accounts active in between seasons. Ralph Lauren’s aforementioned reorder growth is a prime example of this in practice.

Contract execution is another dimension that the winners have nailed, and we don’t mean that in the usual contract signing sense, but in the details: consignment terms, title boundaries, payment milestones, and delivery gating. The Saks Global situation has shown where risk lies, but also where it can be mitigated to protect margin and revenue.

Brands that had clear consignment structures were able to argue successfully, with court-backed precedent, that their inventory remained their property. Brands that did not had less to stand on.

The same logic applies lower down. Profitability is lost when payment terms are agreed but not enforced, when delivery gates exist but are not connected to shipment decisions, or when chargeback provisions are documented but not tracked.

Often though, the issue is rarely the contract itself, but whether it can be executed consistently. This is especially true for models like consignment, where ownership, replenishment, and sell-through have to stay tightly managed together.

When brands have operational control, through allocation rules, ringfencing logic, realistic ATP, and customer-specific replenishment, their operations are significantly more coherent across wholesale, DTC, and owned retail. But all this does depend on the right system.

Those who run with these controls via disconnected tools and manual processes tend to discover gaps at the wrong moments, e.g., when inventory is scarce, when a retail partner is struggling, or when a season’s demand deviates from what was planned.

It is much simpler to manage this level of coordination in a low-velocity business, but in a multi-channel, multi-market, in-season-reorder environment, it most certainly is not.

Control is now the defining capability in modern wholesale

Wholesale is not a growth channel that has fallen on hard times; it’s evolving into a set of deliberate choices about where to deploy inventory, with which partners, and on what terms.

But none of that works without the right governance.

This is the work we focus on at K3, building systems and controls that sit behind modern wholesale, from allocation and ATP through to replenishment.

If these are challenges you’re working through, it might be worth us having a conversation.