A Common Problem

Carole Sloan, February 28, 2005

Analyzing the reports from the Big Guys in retailing, there are certain realities coming to the fore.

It's a no holds barred challenge in terms of price points and design and an apparent level of quality.

This is increasingly evident with launches from the likes of Target with its silk quilts and its 400-count Egyptian cotton sheets in its new Fieldcrest collection.

And even more striking from the same folks in Minneapolis is the success of the Global Bazaar limited edition eight-week event that ended just recently. The success of that has encouraged management to plan even more of these in-and-out events to create excitement as well as sales.

But even as successful as the Global Bazaar was, Target as well as many of its competitors are still plagued with the awesome amount of out-of-stocks that are evident by walking through the stores.

It's a situation that spans the range of retailing from Target, Wal-Mart and Kmart to Sears, Penney, and a host of department stores. As for the big boxes, it's touch and go from department to department.

With retailers like Federated planning almost as radical a program for its home area, fashion merchandise in the home textiles world is pegged to a four to six times a year turn.

And Terry Lundgren, Federated's CEO said at a recent National Retail Federation presentation that if the goods aren't selling in two weeks, they should be cleared out. They won't sell any better later on was the viewpoint.

Now all of this is well and good. But stroll through your local shopping mall as well as a couple of off-mall centers and the challenge of replenishment of regular goods and the timely arrival of a new collection or concept is clear.

Execution is key — and even Wal-Mart has challenges in maintaining inventories of basic merchandise, much less fashion stuff.

We're talking basics like toilet paper, Tide and kids' underpants — not a missing bedskirt from a multi-sku ensemble in stratospheric price points. But it is at those lofty offerings that missing skus become even more critical.

As the likes of Target move onto the department and specialty store turf it will be interesting to see which retailers sharpen their inventory practices.

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