TAKING MARKDOWNS

Fewer markdowns are the reward for a job well done.

  • Not all stores go on sale at the same time and not all stores take markdowns to the same degree. Designer stores tend to go on sale early. Mall stores follow the anchor stores and chains. Resort stores have unique seasons. Each independent should be guided by their own circumstances.
  • For both customers and staff alike, major sale periods end the season and great care must be taken to do this at the proper time.
  • Season-ending sale periods are a necessary evil and not something to be glorified.
  • Small amounts of ever-present sale merchandise has worked well for many, but not for all.
  • A lean, fast-turning inventory made up of frequent, smaller deliveries creates less need for major sales than a sizeable, front-loaded inventory.
  • Since major sale periods have a brief lifespan, maximum marketing and display effort should be expended to take full advantage of the first few days.
  • Markdowns from over-buying are just as costly as markdowns from duds.
  • A disappointing season with below-plan sales or excessive buying errors will produce lots of markdowns. A good season, with strong sales and high sell-throughs, should produce a manageable amount of markdowns.
  • The ideal situation is to have seasons with five months of strong margins followed by one month of aggressive markdowns.
  • In-season markdowns should be no less than 30% off and final, end-of-season markdowns no less than 50% off.
  • And finally‚ĶIt does little good to plan for a major sale if there is insufficient new inventory scheduled to arrive by its conclusion.