Brands Briefing:  How fashion brands deal with the uncertainty of inventory planning in the age of tariffs 

Pavone is one of a number of founders making tough calls on inventory levels as tariffs take their toll. Most e-commerce brands place orders months in advance, and fluctuating tariff terms have thrown a wrench in their planning, leaving them unsure of how much to order. It’s a particularly acute challenge for fashion brands, which are dependent on seasonal inventory. If items like swimsuits or winter coats miss their selling window, brands are stuck storing SKUs for multiple seasons. Many brands are already dealing with lower sales and a lack of consumer demand, and the wrong inventory calculation could be the answer between keeping the lights on, careening toward layoffs or missing projections.

Pashion makes its shoes in China and had long benefitted from the de minimis loophole that allowed certain low-cost goods from China and Hong Kong to enter the country duty-free. Until recently, Pashion had not been paying tariffs, Pavone explained. Now, she’s paying anywhere from a 36% tariff to a 75% tariff to bring in various shoes consisting of different materials. What’s more, her fall order is set to arrive sometime in August — and U.S. tariffs on Chinese imports only stay at 30% until mid-August.

Pavone doesn’t want to take any chances in case tariffs shoot back up to their previous level of 145% or worse, she explained. “I want to make sure I have enough budget left over to pay whatever the tariff is, which, for all I know, could be 200%,” she said. “I’m not comfortable maxing out that million-dollar budget. We have to leave wiggle room.”

In this climate, apparel and footwear brands like Pashion are forced to redo their inventory projections over and over and over again as new tariffs are announced. But there’s no one guiding source of truth and no one formula they can turn to, to decide how opportunistic or conservative they should be.

One of the people companies are consulting for recommendations is Kathleen Chan. Chan is the founder and CEO of Calico, an AI-powered platform that helps apparel and accessories brands source and manufacture goods at 150 factories. When it comes to inventory, a lot of brands are “making the conscious decision to be very tailored,” Chan told Modern Retail. “They’re saying, ‘Hey, instead of buying 1,000 of this style, can I buy 500 now?'”

Still, it’s not as simple as cutting order volume. Some brands are starting to revisit their materials, too, given that factories in certain regions specialize in particular fabrics and techniques. This is the case for women’s workwear M.M.LaFleur, which makes about 70% of its goods in China. It’s now exploring alternatives to traditional wool and silk production, as China is the world’s leading producer of both textiles.

“This most recent round of tariffs has made us actually say, ‘OK, do we actually need to get out of the silk business altogether?’ Because we can’t really do silk elsewhere,” CEO Sarah LaFleur told Modern Retail. “We’re essentially being forced to rethink our entire material matrix.” While it’s not possible for the brand to make changes in time for the fall, M.M.LaFleur is actively planning to increase alpaca-based products, such as wool from Peru, for its 2026 collections.

Pashion, too, is having to rethink its styles of shoes as tariffs stack up. In footwear, different materials have different duties attached, making some units more expensive to import than others. Pashion’s patent-leather sandals have a base duty of 17%, while its full-textile boots have a base duty of 37%. Some of Pashion’s best-selling styles are textile-based, but, “economically, it’s not going to make sense for us to make textile footwear anymore if this continues,” Pavone said. “We’re having to be much more narrow in the assortment, which is unfortunate.”

This doesn’t mean that Pashion will fully ditch its textile-based SKUs, but it does plan on scaling numbers back. “There’s a handful [of styles] where they’re so popular that we’re still going to have them in small quantities,” Pavone said. “But in the past, this wasn’t something we had to think about with our inventory planning. Everything was treated the same when it crossed the border. That’s not the case anymore.”

Tariffs are also forcing Wild Rye, a women’s technical apparel brand, to reduce its product offerings. Wild Rye manufactures in China, and it’s cutting up to five of its 25 core styles planned for the fall. Those particular products either have very thin margins, founder Cassie Abel told Modern Retail, “or we don’t anticipate having enough demand, given the price increases required.”

Wild Rye will still have to pay for trims and fabrics, “so in some cases, we’ll be out that cash,” Abel said. Wild Rye is also looking to push products to a later season. The brand is already increasing prices due to its razor-thin margins. Most of its price hikes are around 15%, although its largest increase for the fall will be a 23% hike on a pair of bike shorts. Those will jump from $129 to $159, “which will undoubtedly lead to a decrease in demand,” Abel said.

For its part, M.M.LaFleur initially delayed shipping its usual wave of inventory to sidestep steep 145% duties on Chinese imports. Now, the brand has received about 50% less inventory than originally planned for May, with similar reductions expected in upcoming months.

M.M.LaFleur doesn’t want to bring in products that miss their selling window. As such, it’s moving certain products to later in the year. For example, styles meant for May have been pushed to 2026, and M.M.LaFleur is repositioning some collections, such as moving a September dress to the November collection or an August piece to May of next year.

While fashion brands are making moves now, there are still so many unknowns, and founders are uneasy about what could come in the days, months and seasons ahead. “It’s impossible to plan, with so much uncertainty,” Abel said. –Julia Waldow, with contributing reporting from Allison Smith

Job openings to watch 

Trove Brands, the owner of Owala and BlenderBottle, is hiring a VP of marketing for Oath Nutrition, its one-year-old supplement brand that sells pre-workout, protein powders and more. The VP of marketing will “lead and inspire high-performing marketing teams across brand management, digital marketing, product positioning, creative development and customer engagement to achieve aggressive growth targets,” among other responsibilities. 

As hydration remains a hot space, more companies like Trove Brands, which have found success with water bottles, are looking to grow their market share by selling additional products that can be used with the water bottle. Simple Modern, for example, launched an electrolyte brand last year called Trevi, which is available for sale on the brand’s DTC website and through Amazon. Oath Nutrition, meanwhile, is available in Target among other retailers. –Anna Hensel

Earnings to watch 

Last week was a bonanza of big-box earnings, with Target, Walmart, Home Depot and Lowe’s all reporting. This week, there will be a few more big-box earnings trickling in – Best Buy reports on Thursday – along with specialty retailers like Abercrombie, E.l.f Beauty and Capri Holdings, which all report on Wednesday. But perhaps the most interesting earnings calls this week will be from Dick’s Sporting Goods and Foot Locker, respectively, as Wall Street looks for the two companies to shed more light on Dick’s Sporting Goods’ plans to acquire Foot Locker for $2.4 billion and how, exactly, the two banners might live together. –Anna Hensel 

What we’re reading

• Hoka’s DTC sales slightly declined in the U.S., its parent company Deckers reported during its fiscal fourth-quarter earnings. The decline was due to “higher levels of promotion on outgoing models and slower new customer acquisition,” among other factors.
• Nike has started implementing price increases on a wide range of products, CNBC reported. Footwear priced between $100-$150 will go up by $5, as just one example, a source familiar with the matter told CNBC.
• Levi’s is offloading Dockers, selling it to Authentic Brands Group for $311 million. 

What we’ve covered

• Shopify wants to position Shop as a “social app” with a slew of new features. 
• How the Substack strategies of American Eagle, Madewell and M.M.LaFleur stack up. 
• How brands like Ollie, Olipop and Faherty are trying to make smart bets with their marketing budgets this summer.