The Out of Fashion Inventory Problem

Maryanne Smith Bohlinger
Revised by: Nancy J. Rabolt , Judy K. Miler

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781474208789.015
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An established women’s specialty store opened a new small boutique catering to their upper income market sector of conservative New England women who want exclusive, high-fashion merchandise. The boutique would allow them to try a new merchandising approach to hopefully gain more of a fashion leadership role and draw a higher fashion-oriented customer than their other store. It was immediately successful and quickly the store gained a high fashion image. However, a new buyer discovered a large amount of old, out-of-fashion, expensive stock in inventory. After doing a physical count, it was found that 25 percent of inventory dollars were tied up in slow-moving and old stock. The previous buyer bought new, exciting merchandise and merely stored the slow-selling items in the stockroom, some for over two years, undetected by others. This created an inventory and budget problem for the new buyer that needed to be resolved.

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