How Much Value Is Locked in Fashion’s Returns and Unsold Stock?
Mid-to-premium fashion brands hold material value locked in returns that cannot go back to shelf and in unsold stock. The European Environment Agency estimates 4 to 9 per cent of EU textiles are destroyed before use, and McKinsey puts 2023’s fashion surplus at 2.5 to 5 billion items. Most is written off or cleared, and in Opera’s pilots clearance returned under 7 per cent of value.
How much money do fashion brands lose on returns and unsold stock?
The honest answer is that there is no single industry figure, because the loss sits in three separate pools that should not be added together. Each has a clean Tier-1 source, and together they describe different parts of the same problem.
The first pool is textiles destroyed before they are ever used. The European Environment Agency, in Briefing 01/2024, estimates that 4 to 9 per cent of textile products put on the market in Europe are destroyed before use. That is 264,000 to 594,000 tonnes a year. This figure already covers both returned and unsold textiles, so it is not a returns-only number. The full breakdown sits in our piece on how much unsold fashion is destroyed each year.
A second pool sits in overstock. McKinsey and the Business of Fashion, in The State of Fashion 2025, estimate the industry produced 2.5 to 5 billion surplus items in 2023, worth an estimated 70 to 140 billion dollars. That is a global production figure for a single year, measured in units and US dollars. It is not a returns number, and it does not belong on top of the destruction figure.
The third sits in returns that never make it back to resale. A study by Roichman and colleagues (2024) of over 630,000 returned EU garments found that a large share are not resold. Online apparel is among the most-returned categories, and once a garment comes back, a significant proportion cannot go straight back onto the shelf.
For a brand in the £50m to £250m band, the practical question is narrower than the industry totals. It is how much value is locked in your own returns and unsold stock, and what happens to that value once a garment cannot be sold at full price.
Where the locked value sits
The value splits into three places, each with a different recovery question. The Tier-1 anchor for each is below.
| Where the locked value sits | Tier-1 anchor | The recovery question |
|---|---|---|
| Returns that cannot go straight back to shelf | EEA Briefing 01/2024, and the Roichman et al. (2024) study of over 630,000 EU returns, which finds a large share are not resold | How much of the returns flow can be brought back to resale-ready, rather than cleared for the under 7 per cent seen in Opera’s pilots? |
| Unsold stock and overstock | McKinsey and the Business of Fashion, The State of Fashion 2025: 2.5 to 5 billion surplus items in 2023, worth 70 to 140 billion dollars, global | What disposition route exists for unsold stock that is neither destruction nor jobber clearance? |
| Quality returns with fixable post-purchase faults | Qualitative; see which returned garments are worth recovering | Which faults are fixable enough to return a garment to resale value through cleaning and conditioning? |
Across all three, the garment still holds value that its current route does not recover.
Why this value is written off today
Most returned and unsold stock that cannot be sold at full price follows one of two routes, and both sit at the bottom of the recovery range.
The first route is the write-off. Disposal recovers nothing, and the brand books the full sunk cost against margin: design, fabric, cut-make-trim, inbound freight, duty, warehousing and the cost of handling the return itself. The second route is clearance through a jobber or liquidator, which returned under 7 per cent of a garment’s value in Opera’s pilots. Both are default routes. They happen because there is no operational alternative in place at the moment a garment is graded out of full-price sale.
The full P&L treatment of that decision sits in our piece on the CFO’s case for returns recovery, and the per-garment maths in the unit economics of returns recovery. The point for sizing the category is simpler. The gap between what these routes recover and what the garment is actually worth is where the locked value lives.
What the Returns Recovery Benchmark shows
Opera’s Returns Recovery Benchmark is a modelled, indicative estimate built on data from around 250 mid-to-premium brands. Across that set, the consistent finding is that the recoverable value held in returned and unsold stock is material relative to what brands recover today through write-off or jobber clearance. The figure is far above what a sub-7 per cent clearance route returns.
The benchmark models each brand from a small set of inputs: average resale price, online share, and an estimate of problem garments a year. It is built as a gross, indicative read, and the move from gross to net is a conversation a brand has once its own processing and logistics costs are on the table. The value is real enough to be worth measuring, and it concentrates in the categories where garment value is high and returns are frequent: event wear, occasion dresses, tailoring, outerwear, denim and leather.
Frequently asked questions
How much money do fashion brands lose on returns and unsold stock?
There is no single figure, because the loss sits in three separate pools. The EEA estimates 4 to 9 per cent of EU textiles are destroyed before use. McKinsey and the Business of Fashion put 2023’s surplus at 2.5 to 5 billion items, worth 70 to 140 billion dollars globally. Returns add a further share never resold. For one brand, the loss is its own stock cleared for under 7 per cent, the clearance rate in Opera’s pilots, or written off.
What percentage of returned clothing is not resold?
A study by Roichman and colleagues (2024) of over 630,000 returned EU garments found that a large share of returned clothing is not resold, with the published estimate running between 22 and 44 per cent. The safest reading is directional: a significant proportion of returns cannot go straight back onto the shelf, and once they leave the returns flow they usually take a low-recovery route.
How much unsold fashion is destroyed each year?
The European Environment Agency, in Briefing 01/2024, estimates that 4 to 9 per cent of textile products put on the market in Europe are destroyed before use. That equates to 264,000 to 594,000 tonnes a year. The figure covers both returned and unsold textiles. The detail sits in our piece on how much unsold fashion is destroyed each year.
How much is fashion’s excess inventory worth?
McKinsey and the Business of Fashion, in The State of Fashion 2025, estimate the industry produced 2.5 to 5 billion surplus items in 2023, worth an estimated 70 to 140 billion dollars. This is a global production figure for a single year. It measures overstock specifically, and it should not be combined with destruction or returns figures, which count different things.
Why can’t returned clothes just go straight back on the shelf?
A returned garment often needs grading before it can be resold. It may carry try-on marks, creasing, light soiling or a minor post-purchase fault, and online returns can sit in transit and storage before they are assessed. Without a garment returns recovery route to clean, condition and where needed repair, many returns are graded out of full-price sale and sent to clearance or disposal instead.
How much value can a brand recover from returned and unsold stock?
The recoverable share depends on the brand’s category mix, average resale price and how much of its returns flow it can route to resale-ready preparation. The starting point is the gap between the no-recovery baseline, which is zero for a write-off and under 7 per cent for jobber clearance in Opera’s pilots, and the full resale value of the garment. The recoverable headroom is covered in our piece on the recovery opportunity.
Which fashion categories lose the most value to returns?
High-value categories carry the most locked value, because the per-unit cost of writing a garment off is highest there. Event wear, occasion dresses, tailoring, bridal, outerwear, denim and leather both return frequently and hold significant resale value. Mid-to-premium brands in the £50m to £250m band feel it most, because the per-unit value is high enough to be worth recovering.
The first step is to size your own exposure rather than the industry’s. Measure the value sitting in your returns and unsold stock by category, then weigh what each currently recovers against what it would recover if it came back resale-ready. For brands that want a recovery route in place now the ESPR destruction ban applies, Opera Garment Solutions offers a single point of access to a network of professional garment care experts.
References
- European Environment Agency. The destruction of returned and unsold textiles in Europe’s circular economy. EEA Briefing 01/2024, March 2024.
- R. Roichman, B. Sprecher, V. Blass, T. Meshulam and T. Makov. The convenience economy: product flows and GHG emissions of returned apparel in the EU. Resources, Conservation and Recycling, 2024 (study of over 630,000 returned EU apparel items; between 22 and 44 per cent never reach a second consumer). https://www.sciencedirect.com/science/article/pii/S0921344924004051
- McKinsey & Company and The Business of Fashion. The State of Fashion 2025. 2024.
( About the author )
Joanna Lambert
CEO & Co-Founder, Opera Garment Solutions
Joanna Lambert is CEO and co-founder of Opera Garment Solutions, which recovers returned, damaged and unsold clothing for fashion brands across the EU and the UK from hubs in the United Kingdom, the Netherlands and Spain. She writes on the EU destruction ban and on what returned stock is worth when it goes back to sale.