Analysis
How fast did retailers clear the 2022 inventory glut?
Every apparel retailer’s inventory falls in the January quarter. Holiday selling and post-holiday markdowns guarantee it, which means a large drop on its own says nothing. The useful question is how the drawdown that cleared the 2022 glut compares with what each company does in a normal January quarter. Measured that way, two retailers stand out: Abercrombie & Fitch and Gap, both of which cleared inventory at roughly 1.7 times their own seasonal norm.
By The Retail Ledger · September 27, 2026
Method
For each retailer we took reported inventory at the end of the third fiscal quarter and at the end of the fourth, and computed the percentage decline. We did that for the quarter ended January 2023, the one in which the 2022 glut was cleared, and for the three equivalent quarters that followed. The second figure is the company’s own seasonal baseline, which removes the holiday effect that otherwise makes every retailer look dramatic.
All figures come from the companies’ own quarterly and annual reports and are as reported, not restated. Fiscal calendars differ slightly between retailers; quarters are matched by fiscal position, not by calendar date.
The numbers
| Retailer | Jan 2023 drawdown | Own 2024–26 average | Difference | Ratio |
|---|---|---|---|---|
| Abercrombie & Fitch | 31.9% | 18.6% | 13.3 pts | 1.71x |
| Gap Inc. | 21.5% | 12.5% | 8.9 pts | 1.71x |
| American Eagle | 26.7% | 19.6% | 7.1 pts | 1.36x |
| Kohl's | 34.6% | 29.9% | 4.7 pts | 1.16x |
| Target | 21.1% | 17.6% | 3.6 pts | 1.20x |
What it does and does not tell you
Kohl’s posted the largest raw decline of the five, at 34.6 percent, and it is also the least remarkable: Kohl’s clears roughly 30 percent of its inventory in a normal January quarter. Target, the biggest company in the set, came in closest to its own norm. Abercrombie and Gap are the two that moved furthest beyond their usual pattern.
An inventory line falls for many reasons at once. Markdowns, store sales, packaway, write-offs and bulk sales to off-price channels all reduce the same number, and a balance sheet does not distinguish between them. This analysis establishes the size and timing of each drawdown. It does not establish how any retailer achieved it.
For Gap specifically, the quarter in question is also the one in which the merchandise at issue in Gap Inc. v. SVES GO was delivered. That is a coincidence of timing visible in public filings, nothing more. The quarter-by-quarter series for Gap is in the inventory tracker.
Free to reuse with attribution to The Retail Ledger. Underlying figures: company filings on Form 10-Q and Form 10-K.