Friday
Aug282015

Why create pre-season plans

Profit is determined in part by maintaining a proper proportion between sales and inventory.  The merchandise planner is responsible for providing a pre-season sales and inventory plan that reflects customer demand and reflects the the financial limits and strategy set out by the organization.

 

In each department, a sale plan is made, followed by the inventory plan – ensuring that the inventory levels are necessary to meet these sales goals as planned. Most sales plans cover a six-month period, for example August 1 to January 31, and February 1 to July 31. The budget is prepared in advance of the selling period to which it applies.

 

The information in this budget permits the merchandiser to determine the amount of purchases required. In no way does the dollar merchandise plan address the issue of what merchandise should be purchased. The development of an assortment the reflects customer demand is another important aspect of the total planning process and largely handled by the buyer.

 

 Although the dollar merchandise plans used by different stores very considerably and scope and detail, when properly plant and administered, the sales stock markdowns and projected cumulative markup percentage are the indispensable figures that will result in a strong net profit figure.

 

The main reason for planning is to help the buyer make purchases at the proper time and in the correct amount so the retailer’s stock levels are appropriate (not too high, or to low) at all times. Consequently, the dollar merchandise plan also provides a control figure called open to buy. This figure represents the dollar amount of merchandise the buyer may purchase during the balance of a given period, without exceeding the plan stock figure at the end of the period under consideration.  End of month inventory figures are important.

 

Because of the resulting benefits in pre-season planning, most large and many small retailers are committed to comprehensive planning activities. The planning process is designed to protect stores major investment, that is, it’s inventory. As the art of merchandise planning and its technique is broad in scope – and requires a true expert to perform this job function well.

 

 

To unify merchandising operations the pre-season plans should always:

  • Generate a net profit by providing an tool that plans and controls the purchase and sales of merchandise
  • Research previous results to repeat and improve prior successes and to avoid failures
  • Integrate the various merchandising activities involved in determining the purchases necessary to achieve the estimated planned sales
Thursday
Aug272015

Operational expenses and profit

Operating expenses help to determine whether or not a net profit is achieved, therefore control and management of operating expenses is a significant concern for management and executives.

 

Often, because merchandise planning teams have little effect on operating expenses, they are recorded and ‘planned’ as a rate.

 

OPERATING EXPENSE % = OPERATING EXPENSES $ / NET SALES $

 

The higher the rate, the lower the profit. 

 

32.63 percent is actually quite a high operating expense ratio. Whatever the operating expense rate, it must be incorporated in to the merchandise planner’s pre-season plan. It is typically applied to the gross margin equation, just before planning net-profit for the year. 

Thursday
Aug272015

Operational expenses

Areaware realistic piggy bank

 

Expenses, although taken into account in the gross profit formula, are not usually added to the cost of an item. These are often operational-related, that is items like salaries, travel budget, rent, etc.

 

Operating expenses refer to those expenses, other than the cost of the goods, incurred in the buying/selling process. When all of the operating expenses are deducted from the gross margin figure, the result is often called gross or net profit.

 

Operating expenses support the place of business from which the goods are sold. They tend to fall into two major categories and are charged to a merchandise department to determine the net profit for each department.

 

DIRECT EXPENSES – would cease to exist for a department, if that department were discontinued. The buyer and planner salaries, sales people, advertising for the department, customer delivery expenses, etc. would all fall under the direct expense category.

 

INDIRECT EXPENSES – are those which are not tied to a particular department. Office and store expenses such as maintenance, insurance, executive teams, overhead items like utilities, etc.

 

In retail, direct expenses include salaries for the department, but not salaries for positions that oversea the big picture for the company. For example, Human Resources would fall under indirect expenses, while the planner for a specific department would fall under direct expenses.

 

The number of separate headings under direct and indirect expenses depends on the retailer. A new entrepreneur may have a simpler expense breakdown than a large corporate chain. As a business grows and becomes complex, so does its Profit and Loss Statement.

Thursday
Aug272015

Gross margin - an overview

“In my experience, the term gross margin actually refers to a variety of metrics – all related to profit or potential profit. Very few organizations take a disciplined approach to using the term to represent one metric only.”

 

We looked first at Gross Margin of an item – and defined it as the total cost of goods subtracted from the net sales (or at GM $ = SALES $ - COST OF SALES $)

 

Gross margin from the top level can be an incredibly complex formula, with many retailers using a slightly different formula based on two things:

  • The organization’s accounting philosophy
  • How inventory-related expenses are assigned

 

At a high level, the most common way to calculate GM is:

 

GM = SALES - RECEIPTS + ALLOWANCES

 

Where,

  • SALES is net sales
  • RECEIPTS is COGS or cost of sales in the cost planning method
  • ALLOWANCES refer to any discounts given (to either the customer or retailer from the supplier)

 

Some retailers who wish to understate their gross margin dollars, will include the cost of markdowns in this equation. Our downloaded Q2 merchandise plan uses this formula. Most in the industry would consider this to be ‘double counting’ your markdowns. The sell-price (aka retail sales on the merchandise plan) will already take into account the reduction. Adding the cost of the markdowns to the margin formula only serves to count the reduction again.

 

GM = SALES – RECEIPTS – MARKDOWNS + ALLOWANCES

 

 

Click to enlargeIn the United States, the average gross margin is 36% according to the Retail Horizons Report completed by KPMG in 2012. 

 

Wednesday
Aug262015

Cost of sales

Cost of sales is the second factor in the gross margin calculation in merchandise cost accounting / planning. It is also often referred to as cost of goods sold (COGS).

 

GM $ = SALES $ - COST OF SALES $ 

 

Cost of sales includes the direct costs attributable to the goods sold by a company including the true cost of the merchandise, or landed cost. This includes any in discounts given by the supplier or vendor, any shipping, freight, transport, duties, etc. applied to the merchandise, and the invoiced cost of the goods. It does not include such indirect costs like sales force costs, buying office travel expenses, etc. 

The key aspect of cost of sales is that it applies only in relation to the cost of the goods sold. So you will not apply the cost of the entire order or shipment to the gross margin - only the cost associated with those goods sold. 

 

Check your understanding | A tee's gross margin

Wednesday
Aug262015

Inventory cost values

The cost accounting system values merchandise at the cost paid to the vendor or supplier, plus any other relevant factors including inbound transportation charges, freight, vendor allowances. The cost to the retailer of each item is recorded at sku level – coded on the price tag or merchandise container.

 

There are many factors which fluctuate with each delivery for each SKU: currency exchange, discounts applied to some orders (i.e. late deliveries, in-season repeat purchases, etc.) and not others, shipping and warehousing cost fluctuations, etc. Because of these variances, the cost for each SKU is often the weighted average.

 

Weighted Average Unit Cost = Total cost of inventory / Total units in inventory

 

  

Weighted average unit cost = $19,500.00 / 7000 units

Weighted average unit cost = $2.79 each

 

Inventory values are not adjusted to reflect style changes, end-of-season markdowns, or sudden surges of demand. 

Tuesday
Aug252015

The benefit of cost planning

Whether your organization uses cost planning or retail planning will really depend on one of two things:

  • Where your organization intends ongoing
  • How your organization originated

 

For example, many retailers that began as wholesalers that is brands that told directly to retailers, continue to use the cost accounting method of merchandise planning.  Almost all brands that do not sell direct to customers, wholesalers, distributors use the cost accounting method.

 

Today, many large retailers like major department stores etc. are switching more and more to the cost accounting method of retail planning. The forecasting in planning process is slightly different in terms of gross margin, and many retailers are finding that it provides a more accurate picture of where the seasons results will actually come in.

 

From a retail math perspective, the gross margin formula in the cost method is different than that of the retail method. This is largely because of how markdowns are applied.

 

GM $ = sales $ - cost of sales $

 

This means that the margin is attached to each item’s sale – and is calculated and measured only at the point the sale is made. Margin is measured at the lowest level of detail, enabling actionable profitability analysis. We can see which items have the greatest margins, which vendors are most cost-effective, which marketing programs drive profit, etc and all of this information and insight can be gleaned without having to wait for the month to close. In planning and in forecasting, gross margin and GMROI are more accurate.

 

 

Regardless of which method you use, the merchandise planner will still plan sales, receipts, inventory, and gross margin. In the cost method many companies don’t plan markdowns, but they should plan both promotional and for markdowns as a guide to make decisions and keep aging from becoming an issue.

 

 

In the cost method, the impact of the markdown is only applied when the product is sold. So overtime all the product is sold and the markdowns are all applied to the profit curator. Theoretically, if an item is never sold, the cost of the markdown is never applied to the profit.

 

 

The most important asset metrics are inventory units and inventory cost dollars because this impacts cash flow.

Tuesday
Aug252015

Pre-Season Plan Objectives

 

 

Constructing a strong pre-season plan is truly an art and a science. A good plan has elements of risk management built into it, while still showing optimism for the best business opportunities.

 

Pre-season planning is predicting future demand for product and purchasing accordingly. It involves a number of different business functions, and a well-  connected supply chain. A good demand planner will have a strong understanding of:

  • Sales and your customer
  • Manufacturing, logistics, marketing, and finance

 

Typically, high level demands are completed by the merchandise planner with input from buyers and direction from planning directors and executives.

 

As the planner, you are the subject matter expert, having an acute understanding of the businesses metrics and results. The buyer represents both the customer and supplier. Collaboration is key between the two teams. To create a plan that your supplier(s) cannot execute is useless. For example, shifting fall merchandise purchases forward by one-month is only an option if the supplier is able to execute and produce the product one month in advance.

 

There are three business objectives a planner is trying to achieve through effective pre-season plans:

  1. Sales increases
  2. Profit increases
  3. Higher turnover and more effective inventory management

 

 

 

Remember, while pre-season plans are generally pushing for the above three objectives, there is also sufficient risk management built in – not just optimism for business opportunities. 

 

 

Tuesday
Aug122014

Merchandise plan introduction

The merchandise plan is a high level tool that every merchandise planner, buyer, divisional director, president, and merchant uses daily. It is used as a planning document for future seasons, a reference for previous year's results, and in-season to manage the business. For more on how planning interacts and is important to fashion, buying, brand management, and account managers, the following Courses / Workshops will be useful: 

 

 

 

The merchandise plan typically covers a full season, or six months. To maintain a bit of ease in our learning, we'll frequently use a quarterly merchandise plan (or 3-month period). 

 

Download the reference merchandise plan. 

 

Next - Merchandise plan - key metrics

Monday
Aug112014

In the midst of change at the big 4 surf brands

quiksilver.com

No one would deny the action sports world is undergoing a significant shift. After years of unstoppable growth, acquisitions, and brand extensions, the industry has found they have spread themselves too thin.

 

Sales in core brands has slowed, while profit margins have declined (if not entered into negative territory). In search of financing, at least two of the major four brands – Billabong and Ripcurl - declined to reach a deal in a ‘hostile’ IPO and buy-out market.

 

2013 was the year the industry took a good look at itself, and outlined how they would adjust and transform their businesses to remain relevant to a younger audience.

 

 


 

 

 

 

Much of the media coverage has been focused on changing and uncertain executive posts. Quiksilver replaced 7 of the 10 executive posts in 2012-2013 with leaders from strong global brands (i.e. Nike, Disney, etc.). From 2012 Billabong has seemed uncertain about the permanence of the leadership in the CEO post. What was underestimated in the coverage were the subtle, yet significant shifts in the ways these brands do business. Kelly Slater moving on from a 20+ year relationship with Quiksilver is a perfect example.

 

Sounding similar to many retailers strategy statements, Quiksilver’s 2013 profit improvement plan outlines a focus on core brands, the reallocation of marketing to social, and a shift from a regionally to globally managed company. Here’s how it breaks down.

 

 

FOCUS ON CORE BRANDS

The core brands for the organization are Quiksilver, Roxy and DC – the girls surf line showing the largest growth as of late. Quik has already exited its womens contemporary business, Dane Reynolds’ Summer Teeth, VSTR and Hawk. Muskova, Lib Tech, GNU, surfdome, and the iconic Maui and Sons are left. They’ve all be noted as “not significant”, with Maui and Sons also receiving an ‘x’ instead of a check for sustainability. 

 

 

MARKETING STRATEGY

In 2013 alone, Quiksilver released 100+ athletes and cancelled numerous event sponsorships. In 2012 the company estimated that they spent only 15 percent of their marketing budget on activities related to product “demand creation”, and 50 percent on athletes and events. By 2013 Quiksilver estimates their demand spend will be closer to 70 percent, with athletes and events making up 10 percent of spend (salaries and T&E make up the rest). Cue the Kelly Slater announcement

 

No one in the industry today would fault a shift to social media spend, such a drastic move will have larger industry implications.

 

Action sports are an industry that has built its growth and popularity through event and athlete sponsorship. If the big three aren’t going to do this, we’re not sure who is. While this may be the right decision for the company, the move won’t do much for strengthening or growing the size of the market. 

 

It’s always better to grow the size of the pie before dividing it up. The big 4 may just be competing for market share at this point.

 

 

SUPPLY CHAIN OPTIMIZATION

This is where great work is being done. Previously only 20 percent of Quiksilver styles were globally available, as much of the design and purchase orders were written regionally. The company was developing 51,000 styles annually.

 

Consistent brand identity is easily achieved with one collective voice and one product offering. Weather requires some variations, but the goal of reaching 70 percent global styles seems both a prudent use of design resources, and a wiser move to develop global brand strength.

 

Demand and merchandise planning are also being done at a global level will which allow the company to achieve better pricing and delivery as they will now have more significant volume. Reducing their vendor base by over a third – and utilizing them across brands, will also allow for greater simplicity throughout the supply chain, and the pricing efficiencies mentioned above. This aggregated factory model will also allow the organization to push more responsibility to the supplier-level, including pre-packing for larger retail clients.

 

Of course, it wouldn’t be a sourcing strategy in 2013 without talk of shifting production to lower cost countries. While we have mixed feelings about this, because the skill in each of these low-cost regions (Bangladesh, Indonesia) is still developing. A certain quality of product needs to be maintained.

 

 

 

This year's 2014 first quarterly losses are coming from the wholesale channel, which decreased by 7 percent. This may be a result of true demand for the product, or a shift in wholesale sell strategy. In 2013 the company switched to a single sales team to support all brands.

 

Direct to consumer channels showed the best growth for the first quarter this year, comp store sales increased by 2 percent, while the total retail channel increased by 4 percent. E-commerce, as expected, is the fastest growing channel at 16 percent.

 

QUIK IS NOT ALONE

Billabong is going through a similar restructure, although with less certainty. The brand has been plagued with buy-out and share sale talks since 2012, with uncertainty surrounding the CEO post.

 

Similarly, the company is in the process of shedding excess weight. Billabong has successfully extinguished future purchase obligations with Nixon, sold Canadian Chain West 49 to YM Inc., and shuttered the doors on 158 under performing retail stores.

 

Reducing supplier base by 75 percent while focusing on the “core business” will also help the brand achieve efficiency in pricing and operations. The brand will retain its regional organization – Americas, Europe, and Australasia.

 

 

Operationally, both Quiksilver and Billabong are doing the right things to ensure they remain in business for the next decade and beyond. Coming off of a local focus and emphasis on new brands, the businesses are cycling around to their core competencies.

 

What we look forward to next are the conversations around innovation, which is what will be needed to maintain their relevancy in the market. Technical fabric innovation, design innovation, and lifestyle innovation. 

Monday
Aug112014

The importance of item and category analysis

ITEM ANALYSIS

Monitoring item sales is important for recognizing 'bottom-up' opportunities. It is these opportunities that often deliver higher item increases than a professional would normally plan. If appropriately identified, item-level opportunities will ensure your positioning as a retailer carrying the best, most in-demand product for your customer.    

 

If a business is selling through an item in two (2) weeks every time they are delivered, whether it be aztec printed sheets, striped cashmere blankets, printed skinny jeans, Ken Diamond moccasins, that retailer is missing a significant sales opportunity.  A sell-out period of two (2) weeks means that customers bought out your entire stock of a particular item in two (2) weeks.  Most retailers have an average sell period between four (4) weeks (or four (4) months) - a sell-out within two (2) weeks is well below that.  

 

Item analysis will help you project how many units you could sell, and therefore buy for a future delivery, for your average sell-period length.  You will see that often the product life of an item is longer than most product-professionals perceive, repeating a success should always be considered, regardless of how innovative or future-forward your customer is. 

Click to enlarge

 

Reviewing item sales enables brand managers to come to an understanding about what product is selling for your store, and what isn't. Anyone carrying or ordering inventory will want to analyze business from this lens. This is not exclusive to retailers. Wholesale agencies, distribution companies, product developers, can all use this information to deliver better sales and product for their customers. 

 

Item analysis is typically in the realm of product managers, buyers, and account executives. It is beneficial for merchandise planners to understand the basics, especially as product professionals may advocate for a different plan based on item-based findings. Key item programs, basic product funds, reserves and automatic replenishment programs are all primarily founded on strong item-specific analysis.

 

 

CATEGORY ANALYSIS 

Stepping back to view your business through a category analysis will: a) provide a broad perspective on which areas of business are growing and at risk; and b) serve as a reminder for which categories are generating the largest volume of sales dollars ($), and which businesses you should receive most of your attention.

 

If you work in a larger organization, management will focus their attention on these metrics.  

The Victoria's Secret shopping experience: functional on the left, sexy on the right.

 

How a business is categorized will depend on how the brand sells product. For example, Victoria’s Secret characterizes their business by sub-collections under the main brand. The presentation in-store shows groups of (multi-commodity) merchandise separated by collection. These businesses are planned and grown based largely on the retail success of their previous seasons' collection.


 

 

 

 

 

 

 

 

 

 

 

 

 

ae.com

Many brands, on the other hand, categorize their business by commodity. They carry one primary label, and often have strong businesses in specific categories. For example, American Eagle has a great strong denim business with which it builds the rest of its businesses around. 

 

 

Graphic tees are another strong business for AEO, which may not be a surprise - the perfect add-on purchase to a pair of jeans. 

 

Bench, another commodity-driven brand, has its success rooted in a couple of key outerwear pieces and hoodies. American Eagle presents itself as a complete collection in-store, while Bench largely supports a more item-based approach. As a result of the success with a few key items, Bench tends to also to isolate certain fabrications in its analysis. 

 

 

 

harveynichols.com

A hybrid model is becoming increasingly prevalent for retailers and brands around the globe. Collections have a high trend and fashion appeal, driving quicker turnaround. However, the commodity blends are important for driving key item sales, and ensuring the ‘bread and butter’ of the business is maintained.

 

 

 

 

 

harveynichols.com

 

CATEGORY ANALYSIS IN SALES & BRAND MANAGEMENT

If you are a multi-brand sales rep or distributor, you will most commonly analyze your personal business by brand and designer – and that is simply because you will likely be representing multiple brands. However, it is important to note that each of those brands may be monitored in the following ways by either the brand themselves, or the retailer: 

  • By commodity.
  • By customer profile (these are your retailer profiles, for example: department store, contemporary, boutique, etc.).
  • By retail price point.  
  • By key programs.

 

Monday
Aug112014

Dinnerware category analysis

Download Excel file or .PDF file with business blends. 

 

 

Simply by looking at a business category’s business blends, we have an indication of whether or not a business is poised for growth or not. The key to this type of high-level, quick analysis is to look at the sales metric, AND a profit-related metric. In the case of Dinnerware’s categories, sales blends are compared with gross profit blends. Markdowns could be another profit-related metric.

 

The sales blend is telling us how big is category is to the total. For example, ceramic dinnerware makes up over a third of sales.  Without seeing last year’s metrics, we can’t see whether or not their piece of the pie is growing or not, but we can say that it is clearly the brand or retailer’s largest business.

 

Ceramic is also dinnerware’s highest contributor of gross profit dollars.

 

However, is appears that ceramic under-contributes in profit dollars versus sales: the category contributes 36 percent in sales, but only 30.6 percent in profit dollars.

 

 

UNDER-CONTRIBUTING PROFIT 

There could be many reasons why ceramics is contributing less in profit dollars than sales:

  • The initial markup on this category could be lower than the department average
  • The mark-up plan could be lower than the department average
  • There was an inventory overage (and more goods were sold at markdown)
  • The markdowns could have been higher than plan
  • Shrink could have been higher than plan

 

What we are looking for are categories that are poised for growth based on higher contributions of gross profit dollars. Higher gross profit dollars may indicate higher regular price sales and/or a higher initial mark-up. Those categories are:

  • Porcelain with 16 percent profit on 12 percent of sales,
  • Luxury pattern at 18 percent of profit on 12 percent of sales, and
  • Fashion at 28.9 percent of profit with only 24 percent of sales.

 

Many retailers will strategically pursue growth (within reason) based on higher profit levels achieved, and the three category examples above may be good candidates.  

 

Friday
Aug082014

Contributions and blends

The terms business ‘contribution’ and ‘blend’ are often used interchangeably in retail. We will make to distinction between the two in this course. What term a retailer uses and when is often a matter of personal conversation preference.

 

A contribution or business blend is a percent to the total. Many retail professionals look at contributions to assess a specific part of the business’ importance to the overall or whole.

 

Additionally, contributions and blends are used to pinpoint areas of opportunity and risk. This is particularly interesting and powerful when comparing contribution rates for two related metrics. In pre-season planning, blends are used in determining areas of strategic growth.

 

BLEND = CATEGORY / TOTAL

 

Some blends are used at the unit level:

  • Size analysis
  • Color analysis
  • Silhouette or commodity analysis

 

Click to enlarge

This size analysis is used to determine a future season's size scale for a particular vendor. That is, how many x-small's, small's, mediums, etc. that the buyer will purchase for a particular style. 

 

 

 

 

 

Contribution blends will always add up to 100 percent, because we are comparing each part of the business to the whole (or total). This is a great way to double check if your math, when calculating blends, is correct. 

 

 

 

 

 

ANALYZING CONTRIBUTIONS

Blends are most powerful when comparing two metrics together. In size analysis, retailers often compare units received with units sold. A buyer, in this case, is looking for any discrepancies between the two metrics, which will show where the opportunities (and risks) in the business are.

 

In the example, we can see that our x-small and small purchases made up 10 and 15 percent of the total respectively. However, when we reference the units sold, x-small contributed to 19 percent of the sales –that is a 9 percent delta or difference. Size small has a similar opportunity, in that the size contributed to 23 percent of the business’ sales.

 

Conversely, 20 percent of the units received were size x-large and only 8 percent of the sales were in the same size. While there is opportunity to increase the purchase blend of size x-small and small, it seems there is room to decrease the purchase blend of size large and x-large.

 

 

 

ANALYZING BUSINESS ASSORTMENT BLENDS

Assortment blends are also commonly used when analyzing business at a higher level. Particularly useful metrics are sales, markdowns, profit and inventory.

 

Planning managers often drive this type of analysis with retail buyers and wholesale account managers. Of course, wholesale account managers would not receive the retailer’s totals, but they would conduct their own internal analysis.

 

  • Customer profile
  • Category analysis
  • Vendor analysis
  • Monthly analysis
  • Commodity analysis

 

 

 

Download Excel file or PDF file

 

In the dinnerware analysis above, we are able to see which businesses are poised for growth based on higher contributions of gross profit dollars. Higher gross profit dollars may indicate higher regular price sales and/or a higher initial mark-up. Many retailers will strategically pursue growth (within reason) based on higher profit levels achieved. 

 

What are the key areas for growth in the dinnerware category? Why? 

This is a good opportunity to test your knowledge - can you calculate the business blends for Dinnerware and determine which areas are poised for growth?

Read John's Dinnerware category analysis

Friday
Aug082014

Retail math introduction

I understood the basic principles of my business, like high sell-thru is good and I should order more.  I knew which math formulas to use.  But it wasn't until I really understood the formulas that I became equipped to drive my business by playing with the different factors in each equation. The number of solutions I had at my disposal grew exponentially as a result.

 

Pull and Bear fall 2013 campaign

 

What drives most people into retail is the product. Product is interesting, beautiful, technologically advanced. The best product inspires customer to buy, because it not only serves a need, but it fulfills a desire.

 

The foundation supporting the business of product - from production to sales - is retail math.   

 

Understanding sales and costing are the most basic fundamentals. In merchandise planning constructing accurate forecasts, effective pre-season plans, and effectively analyzing post-season results are the three math-based job functions. 

 

 

DISCOVER MULTIPLE SOLUTIONS FOR YOUR BUSINESS

Running a profitable retail business is increasingly difficult. There are difficult market-forces at play, especially sometimes pressed consumer spending, a markdown-competitive marketplace, a few large retailers dominating categories, and ‘fast fashion’. That is in addition to the difficultly of running an inventory-heavy business like retail.

 

Raising consumer prices, or receiving discounts off product costs are not the only way to increase profit. Realizing there is more than even two or three ways to grow and drive business is the first benefit of understanding the math that underlies the industry. Recognizing multiple solutions that open up negotiations with suppliers and internal teams for more positive outcomes, is the second. 

 

 

AID DECISION-MAKING

There are a number of factors that affect a business, and metrics sometimes paint a seemingly contradictory picture. 

Click to enlarge

In the example above (download .pdf file), sales are up significantly over last year (this year's actual retail sales were $1,283,025, compared with last year's $952.920). However, referencing the bottom line of the report, the gross margin (GM) rate has declined significantly.

 

What went wrong?  How can we get our profit rate back into positive territory, and increase it to at least a minimum standard of 20 percent? 

 

A greater understanding of retail math will mean that the many possible solutions to this scenario become evident. And the best scenario for your business will become clear. 

 

Friday
Aug082014

MERCHANDISE PLANNING | Course Objectives


Delivering profit plans while executing company strategy requires a talented planning individual. It requires a thorough understanding of how each business metric interacts with one another. Add in cross-functional team buy-in, vendor support, customer perception loyalty, and it’s clear a master merchandise planner is more than a number cruncher.

 

The online Merchandise Planning Course emphasizes the connections between the various aspects of a profitable business: sales, the customer, markdowns, inventory management, store productivity, and supplier capabilities. Dive in today. 

 

 

 

OBJECTIVES

 

 

 

AVG USER RATING OVERALL | 9.6 of 10

RATING “The course was worthwhile” | 100 percent