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Sustainability Focus: Lost Stock – Retail Insider


Welcome to our section of the site which focuses on the sustainable side of retail. It’s exciting times for anyone involved in this area as technology and retailers try to keep up with customers’ demand for all things ethical. From palm oil to fur farms, fast fashion to one-use plastic, excess packaging to food waste – this is where the real action is.

This month our sustainability in fashion column is all about Lost Stock which has taken the UK by storm with its fashion box model that sells clothing from cancelled orders made in Bangladesh direct to the public.

We talked to CEO Cally Russell about how it works and why the world just seems to love this idea. 

Cally Russell, founder, Mallzee and Lost Stock

Russell is a very busy man at the moment. His usual full-time job of running shopping app Mallzee has expanded somewhat since he read a quote from a clothing factory owner in Bangladesh during the lockdown. The manufacturer said that because of all the cancelled clothing orders from big brands and retailers if Covid-19 didn’t kill his workers then starvation probably would. Hundreds of thousands of items of clothing already made or in production had no sales channel anymore.

That was enough for Russell and his Mallzee data scientists to swing into action to bridge the last broken stage of the supply chain – and Lost Stock was born. It is estimated that at least $2 billion worth of clothing orders were cancelled in developing countries through the pandemic leaving factory owners unable to pay their workers so in super quick time Lost Stock set up a whole new logistics process for diverting at least some of those clothes from landfill and into the homes of UK consumers.

The process follows a straightforward fashion box process where the purchaser tells Lost Stock about their preferences in terms of sizing, colours, styles and then receives a selection of three items informed by those choices. The cost is £35. “This is shopping for good,” says Russell, “but all the products are sold at a 50% discount from what would have been the retail price so it is also good value”.

The company originally envisaged possibly selling 10,000 boxes in the first month and then perhaps 50,000 over the whole year. “We sold 105,000 over the first two months” he continues, “and we have had to expand from men and women’s wear to include children’s wear”. A child’s box also sells for £35 but includes five pieces of clothing. Every box sold supports a factory worker and associated family for a week.

Workers at one of the Bangladeshi garment factories

Lost Stock partners directly with factory owners and the Sajida Foundation and is fully transparent about where the money is going. According to Russell it is against Bangladeshi aid rules for an NGO to give out cash donations so 37% of the £35 goes in vouchers via the Sajida Foundation to workers and 30% goes to the factory owner to pay for his product costs. The rest is split between Lost Stock’s staff and marketing costs and the logistical costs of getting the items back to the UK.

But who is buying? “We have 90,000 different customers and we are so excited about what this could build into long term. We thought it might just appeal to females under 30 but no! There has been huge support – everyone from vicars on Twitter to fashion influencers on Love Island. It seems to tick everyone’s boxes,” he explains.

All the products are de-labelled so users have no idea which shop or brand their products were originally destined for but the element of surprise about the contents is one of the positives that consumers are enjoying. The lead-in time to receive a box is 6-8 weeks, which reflects the fact that the factories in Bangladesh have had to completely re-order their logistics to arrange deliveries to new pick-up points but Lost Stock has managed to turn even that into a positive by marketing the box as a surprise present to your future self.

In terms of the future Russell is hopeful that Lost Stock can continue to make a difference long after Covid-19 is a distant memory. “We live in a continuously demanding society but I would argue Lost Stock shows it is possible to rebalance the supply chain and share out the profit margins in a different way.”

Russell has spent his recent working life running his shopping app Mallzee which he describes as “tinder for clothes” – and trying to help retailers reduce discounting and predict what will sell. He says he will be advising those clients that “now is the time to look at your supply chain” and concludes Lost Stock represents a really exciting opportunity for retail.

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