The rapid pace of tariff rate changes throughout the year gave fashion and beauty brands alike major headaches in the lead-up to the holiday season. Now, new data on the volume of products being imported into the U.S. paints a picture of how brands prepared for the season.
According to a new report from the global shipping and logistics company Descartes, which tracks import and export data and consults with businesses, imports to the U.S. were down 0.1% from September to October this year, which marks only the second time in a decade that U.S. imports have declined month-over-month in October. Along with Jackson Wood, director of industry strategy and global trade intelligence at Descartes, Glossy spoke with several fashion brand executives who shared how their inventory strategies have shifted heading into a very different holiday season.
Normally, October is when imports start to tick up. In 2020, imports increased by 7.9% between September and October, while in 2023, they increased by 4.7%. This year’s decline suggests that brands have followed through on the strategy to front-load their inventory orders, bringing more products into the country earlier in the year before tariff rates increased.
“Peak season normally begins in September and is a rush to Black Friday and Thanksgiving,” Wood said. “With tariff uncertainty and a broader degree of friction between global trade partners, a lot of U.S. importers brought in inventory earlier. For China, tariffs were, at one point, 140%, then 100% and now 34%. With all those peaks and valleys, companies were thinking, ‘Maybe we sit on the inventory longer than we usually do.’”
But the process of importing holiday inventory earlier in the year hasn’t necessarily been seamless. Elizabeth Allen, owner of the sleepwear brand Elizabeth Cotton, told Glossy that, in some cases, ordering earlier created additional billing headaches.
“All of our materials were delivered to our New York City factory in May and June, and the biggest change we saw this year was that fabric was actually delivered before we were [charged for] tariffs,” Allen said. “Typically, FedEx or DHL won’t deliver goods until customs fees have been paid. But I think that, because they weren’t clear on what the rates would be, we received orders without paying at the time of delivery. We received bills later in June and July.”
Receiving goods without knowing how much the tariff rates will be on them makes it nearly impossible to plan effectively. In response, Allen said she hasn’t made any changes to her brand’s shipping policies but is instead focusing its holiday season sales on selling in the U.S., rather than to international customers, to avoid further complications with international shipping. Elizabeth Cotton’s materials are mainly imported from Europe, and the brand has been sold in retailers including Neiman Marcus, Nordstrom and Fred Segal.
Ashley Full, a luxury retail veteran who owns and runs the West Palm Beach-based luxury fashion store Amour781, said she has made sure to negotiate and include tariffs in any inventory orders she has placed with fashion brands. She has also begun giving preference to brands with their own U.S. distribution centers when ordering products to avoid unexpected or delayed tariff expenses.
“This holiday season, I think the financially smart move is to keep inventory lean and focus on selling what you already have,” Full told Glossy. “It is better to move through your existing stock than to risk sitting on high-cost items and taking a loss going into the new year. Less can absolutely be more when you are strategic about it. The consumer will find something they like, especially during gifting season.”
Beyond the timing of their inventory orders, smaller fashion and apparel brands have had to make a host of changes ahead of the holiday season, including changing shipping partners and absorbing thinner margins.
“Striped silk from India is 50% more expensive, and my prices are already not cheap,” said Megan Lagueruela, founder of the zero-waste fashion brand Megan-Ilene. “As it stands, I will either have to make a massive shift in the materials I’m using or hike my prices.”
Kristen Allen, founder of the fashion brand Exclusively Kristen, told Glossy that she relocated her business from the U.S. to Hong Kong last year. When the Hong Kong Post suspended parcel shipments to the U.S., she was forced to switch to a private courier that cost four times more. She also had to raise prices while taking in less profit.
“As a small business, I can’t offset costs the way larger brands can, so I’ve had to scale back production quantities and accept thinner margins,” Allen said. “I now avoid U.S.-based shippers entirely after a shipment was stuck in customs for 30 days. I only use Chinese-based logistics companies because they tend to move goods more efficiently. All of the packages I send via SF Express arrive in 6-8 days.”
Jeremy Smith, the owner of the cult menswear boutique Standard & Strange, recently relocated to Kobe, Japan. While Standard & Strange’s three physical stores are all in the U.S., many of its brands and suppliers are small-scale, high-quality shops based in Japan. Smith has been critical of the tariffs and moved to Japan to forge deeper ties with his Japanese partners.
While Smith hasn’t front-loaded inventory for the holidays, and called front-loading strategies like using bonded storage a gamble, since tariff policies change so rapidly. He told Glossy that there isn’t an easy answer for fashion companies that want to keep prices low, keep margins high and stay loyal to their manufacturing partners when preparing for the holiday season.
“I don’t countersource,” Smith said. “I work with people, and I’m not going to change or replace them because of tariffs. The Japanese brands have raised their prices collectively. People can fight me on this, but I think retailers need to maintain a 2.5x margin, or else you’re going under. If people claim they’re doing 1.5x margins with DTC, I think they’re lying.”
Smith said at Orslo, a beloved Japanese denim brand he works with, jeans have gone from around $250 to $400, and other Japanese brands are raising prices at similar levels. He said Standard & Strange isn’t changing inventory levels or front-loading, since his small-scale suppliers can’t move any faster than they already are. Instead, he’s tinkering with margins and prices.
“Do I take a 1.9x margin to keep it fair to the customer and try to make my margin back elsewhere, like with our own T-shirts?” Smith said. “I want to take as little out of my customer as possible. Right now, tariffs from Japan are not too bad [around 15%]. But it still sucks, and who knows if it might change again?”
