Inventory obsolescence poses major profitability challenge for retailers: Nuvama report

Inventory obsolescence remains a significant challenge to profitability and poses a considerable hurdle for retailers, according to a report by Nuvama.

- TBG NETWORK

The report highlights that a single year of poor performance can wipe out profits accumulated over several years, especially for retailers managing rapidly depreciating inventory, such as fashion and other fast-moving goods.

Industry experts echoed these concerns, noting that measures are being adopted to mitigate the impact of inventory obsolescence on overall profitability.

"High rates of obsolete inventory affect profitability, the long-term viability of a business, and the financial health of an organisation. It also damages the brand image and the ability to attract investors," said Salloni Ghodawat, COO and Director of Ghodawat Consumer Ltd.