Overview
6-Month Buying Plan
Objective
Practical application of the retail mathematics used in relation to the calculations for an income statement, markup, markdown, gross margin, turnover and a six-month buying plan.
Role
Research, Copywriting
Tools
Microsoft Excel
Three strategies that will drive the 4.5% sales increase for the season would include evaluating previous rate-of-growth patterns and looking at prior season statistics. Understanding past patterns and results would help the buyer make decisions for the current sales plan and have a basis of comparison. Second, the buyer could suggest offering merchandise exclusive to the retailer. This would create a unique characteristic for the retailer, as an exclusive product would attract customers and drive sales, while also distinguishing the brand identity of the retailer. Third, the retailer could implement a new store concept/collection to attract customers and increase sales. This strategy could include examples based on season, current fashion trends, or a fashion and clothing aesthetic targeted to a specific audience.
My plan has a gross margin of 45.6%, which is 2.4% lower than the 48.0% goal for the season. Because the plan does not achieve the gross margin goal for the season, the markup would have to be adjusted. In order to bring the plan to the gross margin goals, the markup percentage would have to increase. To be exact, increasing the markup from 59.5% to 61.3% would result in the gross margin goal of 48.0% for the season.
My plan has a turnover of 1.86, which is 0.03 higher than the 1.83 goal for the season. The turnover in the plan reached the goal due to the sales plan for the season total, $2,901,129.00, being large enough so when divided by the average stock amount, $1,561,249.50, it could equal a value above the turnover goal of 1.83.