Mountains of Victoria’s Secret underwear and apparel are stranded at sea because of shipping jams

• Victoria’s Secret is grappling with supply chain issues.
• Its CEO said that 45% of its inventory for the fall season has been delayed. 
• It currently has product stuck on 100 ships that are unable to dock and unload. 

Victoria’s Secret is feeling the strain of the global supply chain breakdown.

In a call with investors to discuss third-quarter results Thursday, the firm’s CEO, Martin Waters, said that 45% of inventory ordered for the fall season has been delayed because of supply chain issues. 

Increased freight costs and delays to product arrivals will cost the business $150 million in total during the third and fourth quarters, Waters said. He added that the firm is now taking steps to either cancel orders that will arrive too late for the holidays, or import them by air to bypass shipping delays.

The company said that long lead times and delays are also preventing it from ordering more stock that sells well, thus missing out on sales opportunities.

Victoria’s Secret is among many retailers to be impacted by this breakdown. A surge in consumer demand since the end of 2020, combined with labor shortages, has created delays and traffic jams at seaports across the globe, causing massive disruption to supply chains. Now, mountains of items destined for stores for the holiday season are trapped in containers sitting on port docks or on ships waiting to berth.

Waters said that the company has product stuck on 100 ships that are currently unable to dock and unload. 

And he isn’t underplaying the impact that these delays will have on its business. “I don’t buy that scarcity equals faster selling, we don’t see that happening at all,” he said. “25% of our PJs are late, that is clearly bad for business.”

Victoria’s Secret has cancelled 10 million units of inventory that would arrive too late for the holiday season. It’s still expecting to head into next year with more product than usual, which could well end up being discounted. 

“We have just got to hold our nerve and let it play out,” Waters said, adding that he expects delays to last well into  2022.

Retail experts are expecting discounts and deals to be plentiful in stores early next year as retailers look to shift holiday stock that has arrived too late.

Discount stores such as TJ Maxx and Ross are expected to be leading beneficiaries. These stores thrive when the supply chain is disrupted – when product is in the wrong place at the wrong time – as it gives them more opportunity to buy inventory.