6 Month Merchandising Plan PDF

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6 Month Plan...

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6 Month Merchandising Plan What is a 6 Month Merchandising Plan? Part 1  Planned sales  Planned BOM (Beginning of Month) stock  Planned EOM (End of Month) stock (Look at closing stock)  Planned reductions (Markdowns & Stock adjust)  Planned purchases at cost (Weekly Intake)  Open-to-buys (Will Review in Week 6)

(Season Total in Italics) (Leave Blanks where Appropriate) (Follow the Layout Exactly)   

A 6 month plan that includes all forecasted sales & purchases that is designed to meet the company's strategic objectives Essentially it is the amount of merchandise needed to generate the planned sales Although merchandise plans can be of any length, the norm is 6 months, separating the distinct selling periods of Spring-Summer & Autumn-Winter (Feb-July & Aug-Jan)

Planned Monthly Sales  Now that you have last year's it is possible to determine realistic targets for the coming period. At this stage a number of factors should be taken into consideration.  When planning sales what would you take into account? - Economic Trends, Competition Trends, Budget, Product Trends/Fads, Store Openings/Closings, Price & Volume Trends 

"Luxury brands including Chanel, Burberry, & Rolex, raised their prices in the UK by up to 30% to combat any currency exchange losses" (Mintel Nov. 2017)

Planned Sales  Assuming a stable/expanding economy, without drastic changes to merchandise, store no. or locations a sensible/ optimistic increase target of 10% may be set for a retail chain  So the new 6 month period of Aug-Dec would rise 10% from 86,000 to 94,600  Each month's planned target sales can then be calculated using existing sales percentage figures  I.e. August last year was 13.9% of Total sales - Aug = 13.9% x £94,600 = £13,149.40

Planned Monthly Sales (E.g. Fat Face)  Sometimes however, management may decide to completely disregard previous sales figures & start from scratch. This can happen for a number of reasons:  A shift in company direction resulting in…  Radically different stock/merchandise  Previous Figures were deemed unrealistic  Too many changes to company structure i.e. new stores etc. for figures to be relevant 

"We must sharpen our brand position, we must move up to plant ourselves firmly in luxury", explained Gobbetti 2017, who said the luxury market was changing & that shoppers wanted more "fashion & newness"

Planned BOM (Beginning of Month)  Determines the amount of stock required to meet the planned sales  Vital to have enough stock to achieve planned sales & meet customer demand  This is achieved by forming a relationship between the planned BOM stock for a given month & the planned sales for that month

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According to the Thomson One Banker database, the average merchandise turnover in the retail clothing industry for the 12-month period ending June 2011, was 3.91. This means that the average clothing retailer sold out its entire inventory 3.91 times during this 12-month period. For example, if today a dealer has 82 used cars in stock, & in the past 12 months they have sold 950 used cars, their stock turn calculations would be: 950/82 = 11.6

How to Increase Stock Turn  Increase sales without increasing your stock levels  Decrease your stocks without interfering with sales  Increase sales & at the same time, reduce your stock levels Low Stock Turn may indicate…  Overstocking  Obsolescence  Deficiencies in the product lines  Marketing issues  Negative PR  Increased competition  Decreased spending confidence not taken into account by forecasters

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A business that can generate the same sales turnover as another - but do so with a lower average stock - must be more efficient as less cost is involved in buying stock & holding stock but you must ensure that you still have an appropriate depth of stock for your customers to choose from (e.g. stock to sales ratio)

Stock-to-Sales Ratio  Stock-to-Sales Ratio is the ratio that exists between the stock on hand at the beginning of the month and the retail sales projected for that same month  Remember a store cannot sell at a 1:1 ratio - the customers would have nothing to look at / browse!  There is no RULE stating what a stock-to-sales ratio should be, but anywhere from 1.5 - 5.0 would be common in fashion retail. i.e. 1.5 - 5 items to every 1 item you expect to sell  The stock to sales ratio does not stay the same throughout the year!  The ratio generally will be calculated from trade sources and an examination of past sales and stock data Stock-Sales Ratio does not necessarily stay the same throughout the year…  If a lower average stock level allows more choice due to the business being able to refresh its stock more frequently….  When would a store want to carry slightly more stock?  When would a store want to carry slightly less stock? (OPENING STOCK / SALES) - (STOCK - SALES RATIO)

Planned EOM (End of Month)  Represents the retail value of the end figure of inventory for each period  The EOM stock for one month is the same as the BOM stock for the following month...