Apart from mitigating the risk of glocal supply chain issues,...

Apart from mitigating the risk of glocal supply chain issues, the inventory build-up could have the following additional benefits:

• The rising price of cotton and other clothing inputs could result in higher costs for new clothing. The additional inventory will cost CCX considerably less than if it ordered and paid for it some months later. This will likely put CCX in a strong competitive position, and should boost profits in late FY22 and FY23.
• CCX will carry less inventory risk than their localised competitors, given that if they have excess inventory after the northern summer, CCX can shift it to ANZ for the southern summer. Localised competitors would have to sell that excess inventory in post-season sales at high markdowns. Also, fashion set in Italy and France in the northern summer remains fashionable in the following southern summer, so CCX should be able to sell their excess quite profitably. Profit will be further boosted by running down that excess inventory in the southern summer as less than normal new stock would need to be ordered and financed.