End of Season/End of Year Issues

Most retailers are approaching the end of their financial year (end January). By now, the end of season sale will be in full swing and every retailer should be forecasting its terminal stock - the predicted end of seasonal stock, which they should have sold by the year end. In practice if they could have managed that, they would have under-performed! Assortments would have fragmented too early and the result would be higher lost sales opportunities. Ideally, terminal stock should be modest, a maximum of 10% of the season sales, and the next season plan should include a separate element planning the sell off of terminal items over the first 6 weeks of the new season. If you don't have this element in your plan, fix it now.

Breaking stock is the stock you finish the season with. Some of it is terminal stock, some of it is year round items and some of it is new season stock already arrived. The year round items may be overstocked or just fine. If they are over, manage the re-buying/replenishment to bring them back to the new plan level, but don't mark them down, except for deliberate promotions, unless your overstock is really serious. For the next season stock already arrived, review your planned allocations and tune them if necessary.

Posted by Brian Hume
5th January 2024

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