As the apparel industry moves through 2026, traditional metrics like sell-through rates are no longer enough. Where, and how, brands sell now defines performance. The strongest companies pair growth with risk intelligence, operational discipline and diversified channel strategies.
Today, channel mix is essential to managing risk. In its State of the Apparel Industry 2026 report, AIMS360 asserts that brands that rely too heavily on one or two channels create concentration exposure that can stall growth when demand shifts.
While the Saks bankruptcy news could make brands wary of exploring wholesale, the report notes retailer-controlled ecosystems account for more than 60% of U.S. apparel sales. The lesson is navigating the challenges inherent with wholesale requires work in the form of monitoring retail partners’ performance and reacting accordingly if they signal distress.
2026 Omnichannel Market Share
Below is a snapshot that breaks down where consumers are spending money at retail:
- Brand-Owned eCommerce (DTC): 15.5% projected share. Growing modestly, but not replacing wholesale.
- Retailer eCommerce: 12.2%. Platforms like Nordstrom’s ecommerce remain retailer-controlled, even in dropship models.
- Marketplaces: 11.3%. Platforms such as Amazon and Shein offer discovery and scale, often with tighter margins.
- In-Store Formats:
- Big Box/Mass (19.5%) such as Walmart
- Off-Price (12%) such as TJ Maxx
- Brand-Owned Retail (10%) such as Zara and Lululemon
- Department Stores (6.5%) such as Macy’s
- Specialty Chains (8%) such as Urban Outfitters
- Independent Boutiques (5%)
Despite social commerce growth and DTC enthusiasm, big box, department stores, off-price, specialty chains, independent boutiques and retailer ecommerce collectively still dominate. Even as discovery shifts online, retailers remain the gatekeepers of scale.
DTC continues to function primarily as a margin and customer-data engine rather than a wholesale replacement. AIMS360 says retailer ecommerce should not be confused with brand DTC; even in dropship arrangements, retailers control pricing, routing, labeling and chargebacks.
Off-price has also evolved from a cyclical outlet into a structural component of the ecosystem, serving as a consistent source of inventory liquidity amid uneven demand.
Ultimately, the report concludes that brands must diversify channels to balance benefits and disadvantages.
Understanding Retailer Risk
Regardless of channel mix, retailer risk scores help brands assess financial and inventory exposure with each partner. These scores do not predict bankruptcy; instead, they guide how much credit and inventory risk a vendor should carry.
Wholesale terms effectively finance part of the transaction. Risk scoring enables brands to spot early warning signs—extended payment requests, postponed POs, recurring routing violations—before they escalate into delayed payments, deductions, chargebacks, or write-offs.
Aims360 offers a framework that buckets retailers on a scale of 1 to 10, from predictable to problematic, and offers suggestions for how best to proceed.
- 1–2 (Very Low Risk): Strong liquidity, predictable payments, resilient demand.
- Operational action: Normal terms, scalable programs.
- 3–4 (Low Risk): Generally stable retailers with manageable exposure.
Operational action: standard limits, routine monitoring. - 5–6 (Moderate Risk): Margin or traffic pressure, but still viable partners.
Operational action: tighter receivable caps, closer review. - 7–8 (High Risk): Clear stress signals—slower payments, financing pressure, vendor disputes. Operational action: reduced exposure, smaller shipments, stricter terms.
- 9–10 (Severe Risk): Active or imminent restructuring.
Operational action: treat shipments like credit exposure; cap or pause.
Using this metric, AIMS360 applies a risk score to a cross section of retailers. Using its framework, wholesale clubs and big-box retailers like Walmart, Target and Costco rank on the low-risk end, while certain department stores and luxury retailers including Belk, Kohl’s and Saks fall on the other end of the spectrum. It’s worth noting that fast fashion marketplaces Shein and Temu fall right in the middle.
Factoring in Returns
Returns remain a structural challenge, one that varies by channel. Just as brands must consider the relative health of their retail partners, they also need to factor in the added complexity of managing returns. Failing to do so will undermine margins.
Online return rates (brand DTC and marketplaces) range from 25% to 38%, driven by fit uncertainty and the practice of “bracketing” size orders. In-store return rates typically fall between 3% and 12%. As return convenience becomes standard, brands and retailers alike need disciplined inventory management and reverse logistics. Further, consumer feedback can help brands identify the root cause of repeated returns, leading to more profitable seasons.
Don’t Fear Major Retailers, Manage Them
The Saks Global bankruptcy underscored how quickly exposure can shift, and fears risk tarnishing the channel. But avoiding major retailers altogether means walking away from scale, brand visibility and downstream DTC lift.
Instead, the report says brands should monitor early stress signals: refinancing pressure, tightening liquidity, slower vendor payments, reduced shipments, assortment gaps and weakening sales trends.
Operational risk may be even more immediate. EDI chargebacks tied to routing, labeling and documentation are common, and often preventable, especially when they are tied to human error. Integrating EDI directly with an apparel ERP system reduces manual errors and compliance deductions.
In 2026, apparel success is no longer about chasing growth alone. It is about balancing expansion with exposure—scaling through diversified channels while maintaining operational control and risk visibility.
