Experts have warned investors in Boohoo, M&S, Next and ASOS to hold off buying up more shares after a range of issues emerged in recent weeks.
Analysts at Panmure Gordon have told investors to hold their positions following an "absence of demand" and reports distribution centres have filled up.
The firm added that retailer's trading patterns this month "will to a degree be distorted" by Black Friday and Cyber Monday promotions so the "distress is likely to become more apparent" towards the end of the month and into December.
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Experts at Panmure Gordon said: "We believe that demand has tightened significantly in the UK clothing market since early October and that this is causing an inventory issue.
"Our information is that distribution centres are full and that this is impeding third parties using apparel online platforms.
"We also note that Marks & Spencer has gone on 20% sale for all coats and boats.
"In part this will have been because of the build up of first phase autumn/winter product with mild weather until recently.
"But it comes at an inopportune time with weather turning colder and suggests that levels of inventory have become critical.
"Introduction of seasonal Christmas lines, which is normal at this time, is likely exacerbating the problem. But fundamentally it is the absence of demand at the source of the issue."
The firm added: "The sector's share prices rebound with the improvement in outlook for US interest rates in early November.
"This has persuaded investors to look through near-term risk at buying into potential recovery early.
"We are inclined to believe that a 7% reduction in UK living standards over the next two years as per the OBR is going to stretch the period of risk to retailer's forecasts further into the future and that the bounce has come too early.
"We are taking some precautionary steps with our recommendations. We are accordingly reducing Boohoo from buy to hold along with Next.
"We retain our hold recommendations on M&S and ASOS, albeit M&S has enjoyed a strong bounce on interest rate expectations and the share price looks vulnerable in the near-term.
"ASOS has generally been unable to avoid any weakening trends in the UK space although its finances have been reinforced by renegotiation of its banking facilities."
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