A piece in the USA Today reports that top retail chains have improved their supply chain management to get the hot new fashions in stores more quickly before.Sounds great, right? Maybe not. According to the article. "With the tighter economy squeezing retailers industrywide, several companies have hit on a successful formula for propping up earnings: They're speeding up the time it takes to get the latest fashions into their stores."
Obviously increased efficiency is great and there's nothing not to like about improved ordering, fewer markdowns, etc. But it could be creating a false sense of optimism if it's allowing for the frontloading of sales. $30 million in sales in the first quarter and then $10 million in the second is the same as $20 million in each quarter: but if you don't know about the differences in inventory situations, you could have a false sense of optimism at the end of the first quarter.
Time will tell whether better supply chain management is messing with the distribution of sales throughout the year.
Why isn't Bank of America updating its shareholders on CEO situation?
Before the bell: Futures sharply lower on Dubai's debt problems
Will Rich Ross really have a positive impact on Disney's movie operations?
Reader Comments (Page 1 of 1)
5-30-2008 @ 2:17PM
Chris said...
"$30 million in sales in the first quarter and then $10 million in the second is the same as $20 million in each quarter"
Uh, no, it isn't the same. Would you rather I pay you today or in 3 months?
I really can see no legitimate downside to quicker time-to-market for fashion products. This isn't a "front loading of sales", it simply a shorter cycle time. It's probably reasonable to assume that there will be more cycles which does mean that fashion retailers will be under pressure to continously come up with new products instead of just the "seasonal" changes, but it also reduces the risk associated with each cycle.