Katie’s Kloset in Cedar Spring Groves

Sales, Smoke, and Small Town Business

LuAnn R. Gaskill
Revised by: Nancy J. Rabolt , Judy K. Miler

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781474208796.0036
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A young entrepreneur, with the help of her parents, has purchased an established small retail business selling moderately priced plus-sized women’s clothing in her home town, a small community in Virginia. Prior to the purchase, it was not immediately apparent that the company was not on a good financial footing despite the review of current records. In addition, to the owner’s surprise the store’s credit was poor resulting in vendors only sending merchandise COD (cash on delivery). Business was not good, so she began to refocus merchandise on a younger target market instead of an older plus-size customer. With little to no retail management or buying experience and with no merchandise plan, the owner went to market. Having no controls of her inventory, it was hard to know what was selling well and what should be purchased. With help from vendors she made purchases for the new customer. Sales continued to be slow, so she created a bargain basement to make room for new merchandise. Sales were successful, but the store began to gain an image as a clearance operation and little full-priced merchandise was being sold. Suddenly a fire caused by a faulty furnace in the store resulted in a complete loss of inventory and records. With the help of insurance funds, the owner decided to reopen the store. This was an opportunity to fix previous business mistakes and poor performance, and make changes that will lead the store to becoming successful. She was now faced with determining what to do.

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