Eli5: what happens to clothing in stores like Macy that goes on huge clearances and never get bought?
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If the clothes does not sell even on clearance sales that means the shop is going to take a loss getting it out of the store. There is a market for unwanted clothes in cheaper countries where people prefer low price clothes over prettier clothes. But even repacking the clothes for export is going to cost money. There are some clothes shops that offer to donate the clothes to the thriftstore. This might be the cheapest as they can offer the thriftstore employees to come get the clothes off the racks themselves so there is no work involved. However it is possible that the customer who buy the clothes from the thriftstore might have bought something else from you so there might be a small loss of opportunity.
Most of the clothes is just thrown in a trash dumpster though as this is the easiest. If it is thrown into a textile dumpster then it will be shredded and can be recycled as textile scraps. Some garages and workshops buy this for rags and then burn them afterwards. They can also be used in various materials such as insulation. They might be rewoven into new textiles. It is also possible to use it as a raw material for various cellulose based chemical processes. Or they are bought as fuel for furnaces that can handle it. But a lot of it also end up as landfill or in garbage incinerators. Either because it was missorted or because nobody wanted recycled textures at that time.
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