Improving Your Margin at Retail

Alan Barnett
Partner
Lightship Partners LLC

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 Improving Your Margin at Retail
Agenda
• Presentation format
• POS-EDI transmissions and vendor portals
• Margin and Sales Levers
• Data management and real life examples

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POS-EDI data and vendor portals

Why were they created?

How are they being used?

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POS-EDI data and vendor portals

• Massive amounts of data are now available

• The question becomes: How to avoid

information overload and take Action.

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POS-EDI data and vendor portals

• How to manage this data

• Identify Opportunities and risks
• Initiate Actions

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WEEKLY SALES REPORT - by floorpplan & Category for Week Ending X
SALES ($000) AVG UNIT PRICE SALES MTD ($000) SALES STD ($000) TTL INV $ ($000) WOS & SELL-THRU for
LAST WEEK
ROOM TY TY LY LY %CH TY LY %CH TY LY %CH TY LY %CH TY LY %CH TY LY ST ST LY
%TTL %TTL WOS WOS Unit
Mens Tee Wall 1,087 14.7% 878 13.9% 24% $6.03 $7.22 -16% 4,367 4,620 -5% 5,183 5,544 -7% 7,301 10,700 -32% 6.7 9.3 6.0% 2.9%
Mens Denim 438 5.9% 339 5.4% 29% $9.53 $7.87 21% 1,715 1,706 0% 1,982 2,014 -2% 4,312 6,494 -34% 10.1 15.2 5.8% 3.8%
Collegiate 420 5.7% 399 6.3% 5% $10.18 $9.43 8% 1,422 2,208 -36% 1,605 2,483 -35% 4,108 5,205 -21% 11.6 9.4 6.3% 5.3%
Mens Casual 375 5.1% 276 4.4% 36% $7.83 $7.22 9% 1,485 1,452 2% 1,743 1,731 1% 4,750 5,663 -16% 12.8 15.6 5.1% 3.5%
Mens Young Men 329 4.4% 249 4.0% 32% $7.45 $7.07 5% 1,348 1,361 -1% 1,585 1,615 -2% 3,922 4,248 -8% 11.6 12.5 5.6% 3.9%
Mens Outerwear 297 4.0% 83 1.3% 257% $15.01 $9.64 56% 961 393 145% 1,049 428 145% 3,624 2,679 35% 15.1 27.3 4.8% 3.0%
Mens Athletic 97 1.3% 82 1.3% 18% $6.48 $10.00 -35% 416 465 -11% 480 551 -13% 1,300 1,986 -35% 12.5 17.1 6.1% 2.2%
Mens Business Casual 97 1.3% 98 1.6% -1% $8.62 $7.59 14% 371 505 -27% 418 576 -27% 1,314 1,657 -21% 14.2 13.1 4.8% 4.4%
TOTAL MEN PL 3,140 42.3% 2,405 38.2% 31% $7.75 $7.75 0% 12,083 12,711 -5% 14,044 14,942 -6% 30,633 38,631 -21% 10.1 12.2 5.7% 3.4%
Sneaker 385 5.2% 604 9.6% -36% $8.55 $13.20 -35% 1,732 3,401 -49% 2,056 4,232 -51% 4,533 13,230 -66% 10.5 15.6 6.8% 3.0%
Surf 96 1.3% 0 0.0% 0% $7.62 $9.98 -24% 475 0 0% 575 0 0% 872 0 0% 7.3 9.0 5.4% 20.0%
B-Ball 4 0.1% 5 0.1% -19% $9.73 $13.97 -30% 20 58 -66% 21 58 -63% 47 8 505% 9.5 0.5 5.1% 30.0%
TTl Branded Men's 485 6.5% 609 9.7% -20% $8.36 $13.20 -37% 2,227 3,458 -36% 2,652 4,290 -38% 5,452 13,238 -59% 9.8 15.3 6.4% 3.0%
TOTAL MEN 3,624 48.9% 3,014 47.9% 20% $7.82 $8.46 -8% 14,310 16,169 -11% 16,696 19,232 -13% 36,084 51,869 -30% 10.1 12.8 5.8% 3.3%

Womens Classic 552 7.4% 539 8.6% 2% $8.41 $8.02 5% 2,387 2,711 -12% 2,758 3,125 -12% 9,631 12,716 -24% 16.1 18.8 3.6% 3.0%
Womens Denim & Ts 199 2.7% 232 3.7% -14% $6.02 $7.52 -20% 788 1,314 -40% 940 1,583 -41% 2,560 4,311 -41% 13.0 13.1 4.3% 2.8%
Womens Activewear 185 2.5% 191 3.0% -3% $5.45 $6.98 -22% 649 1,017 -36% 730 1,126 -35% 2,675 3,793 -29% 16.5 14.9 6.6% 3.9%
TTL WMN PL 936 12.6% 962 15.3% -3% $7.06 $7.67 -8% 3,823 5,042 -24% 4,428 5,834 -24% 14,867 20,820 -29% 15.6 16.5 4.3% 3.1%
Casual 649 8.8% 654 10.4% -1% $9.66 $10.96 -12% 2,563 3,755 -32% 2,976 4,460 -33% 5,980 7,420 -19% 9.3 7.9 5.3% 3.7%
Classic 243 3.3% 270 4.3% -10% $12.73 $15.38 -17% 1,042 988 5% 1,202 1,100 9% 1,735 2,334 -26% 6.7 9.5 7.2% 4.9%
Trend 124 1.7% 180 2.9% -31% $14.02 $13.18 6% 473 828 -43% 542 978 -45% 594 1,546 -62% 5.0 7.5 9.7% 5.4%
Lounge 58 0.8% 96 1.5% -40% $6.97 $9.87 -29% 268 571 -53% 306 690 -56% 707 1,162 -39% 10.5 8.1 3.5% 2.6%
Womens Branded 1,074 14.5% 1,200 19.1% -11% $10.39 $11.93 -13% 4,345 6,142 -29% 5,026 7,227 -30% 9,016 12,462 -28% 8.3 8.1 5.6% 3.9%
Trend 417 5.6% 378 6.0% 10% $8.94 $10.98 -19% 1,715 2,210 -22% 2,068 2,747 -25% 4,941 3,702 33% 11.5 6.7 4.0% 4.2%
Lounge 47 0.6% 51 0.8% -7% $8.00 $11.21 -29% 210 308 -32% 248 389 -36% 439 550 -20% 8.4 7.1 4.3% 3.2%
Teen Branded 464 6.3% 428 6.8% 8% $8.83 $11.01 -20% 1,925 2,518 -24% 2,316 3,136 -26% 5,380 4,251 27% 11.2 6.8 4.0% 4.0%
Sport Branded 144 1.9% 0 0.0% 0% $8.14 $0.00 0% 678 0 0% 823 0 0% 2,092 1 0% 12.3 -73.3 4.9% 0.0%
Total Women's Brnd 1,682 22.7% 1,628 25.9% 3% $9.69 $11.67 -17% 6,948 8,660 -20% 8,164 10,363 -21% 16,488 16,714 -1% 9.5 7.7 4.9% 3.9%

TOTAL WOMEN 2,618 35.3% 2,591 41.1% 1% $8.55 $9.77 0% 10,772 13,702 -21% 12,593 16,197 -22% 31,355 37,533 -16% 11.6 11.0 4.6% 3.5%

Boy 405 5.5% 311 4.9% 30% $6.96 $6.88 1% 1,587 1,706 -7% 1,933 2,072 -7% 5,021 6,427 -22% 12.7 15.1 4.0% 2.7%
Baby 288 3.9% 93 1.5% 211% $5.28 $6.18 -14% 974 465 109% 1,066 532 100% 2,693 1,491 81% 11.1 12.8 5.3% 2.7%
Girl 267 3.6% 153 2.4% 75% $7.47 $6.88 9% 1,028 761 35% 1,207 915 32% 3,296 3,072 7% 12.8 16.1 4.1% 3.1%
TOTAL KIDS 960 12.9% 556 8.8% 73% $6.47 $6.75 -4% 3,588 2,932 22% 4,206 3,519 20% 11,010 10,990 0% 12.3 15.0 4.4% 2.8%

Accessories 170 2.3% 137 2.2% 24% $4.68 $5.15 -9% 764 719 6% 920 869 6% 4,384 6,038 -27% 23.0 33.6 2.3% 1.3%
Other 43 0.6% 0 0.0% 0% $5.90 $0.00 0% 185 0 0% 220 0 0% 4,624 0 0% 99.9 -0.6 0.4% 0.0%
TOTAL 7,415 6,297 18% $7.71 $8.62 -11% 29,619 33,522 -12% 34,636 39,818 -13% 87,458 106,431 -18% 11.8 12.7 4.5% 3.1%

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Overview of Sales and Margin Levers
Partnership

Pre-season Planning
• Merchandise Plans
• Assortment Planning by Attribute
• Localization Planning

In Season Management
• Selectively monitor business at Retail
• Be opportunistic and confront problems
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Partnership – Retailer Goals

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Florida
Merchandise Planning
Merchandise Plan (Balance: Sales, Receipts and Inventory)
  AUG SEPT OCT NOV DEC JAN Fall Total Q3 Q4
LLY Actual Sales 51,221 69,249 53,590 53,019 60,826 38,266 326,171 174,060 152,111
LY Actual Sales 55,120 83,586 59,205 67,911 81,143 54,804 401,769 197,911 203,858

TY Plan Sales 55,319 86,831 57,255 62,439 88,222 72,933 423,000 199,406 223,594
Plan vs LY 0% 4% -3% -8% 9% 33% 5% 1% 10%
Plan vs LLY 8% 25% 7% 18% 45% 91% 30% 15% 47%
% to tot TY 13% 21% 14% 15% 21% 17%   47% 53%
% to tot LY 14% 21% 15% 17% 20% 14%   49% 51%
% to tot LLY 16% 21% 16% 16% 19% 12%   53% 47%
LLY Receipts 121,736 95,493 152,927 81,616 12,915 20,000 484,687 370,156 94,531
LY Act Receipts 235,994 124,381 154,584 207,896 47,172 29,880 799,907 514,959 284,948

TY Plan Net Receipts 177,394 156,607 156,607 221,092 128,970 110,546 951,215 490,608 460,608
Proj Rcpt % vs LY -25.0% 26.2% 1.6% 6.3% 173.5% 271.5% 19.0% -4.7% 61.8%
% to tot TY 18.6% 16.5% 16.5% 23.2% 13.6% 11.6%   52% 48%
% to tot LY 29.5% 15.5% 19.3% 26.0% 5.9% 3.7%   64% 36%
% to tot LLY 25.1% 19.7% 31.6% 16.8% 2.7% 4.1%   76% 20%
LLY EOM 401,559 395,136 448,103 427,543 341,378 264,773 379,749 414,933 344,565
LY EOM Stock 548,125 553,897 606,234 667,035 505,913 402,071 547,213 569,419 525,007

Plan EOM Stock 269,024 282,344 345,980 465,291 451,094 425,711 373,241 299,116 447,365

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Assortment Planning and
Localization Examples

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Fixture Plan-o-gram

Visual Retailing
 Roll up

Visual Retailing
 In Season Management
Action oriented reporting and monitoring
 Sales increases and markdown reductions
• Stock to Sales, WOS, Penetration
• Current ST trends and life to exit date
• Aging
• Color and size selling
• Product availability
• Primarily look where you can take action

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Text goes here

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Extracted from Skypad vcfww.com
 Time Series Analysis

Extracted from Skypad vcfww.com

 Summary Sample Actions
• On Order – Change styles or quantities
• Allocations – Re-balance by Store
• Markdowns – Accelerate or decelerate
timing and depth
• Rebalance inventory - where permissible
• Stage back-up inventory in Retailers DC’s on
best items

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 Protect Yourself
Week Sales Units Sales $ Sales AUR Receipts On Hand Units WK ST % off MSRP

MSRP $180

10/31 - $ - $ - 1,105 - 0.0%  

11/7 23 $ 2,786 $ 121 153 789 2.9% 33%

11/14 82 $ 9,520 $ 116 397 1,297 6.3% 36%

11/21 131 $ 15,591 $ 119 - 1,419 9.2% 34%

11/28 143 $ 16,337 $ 114 - 1,277 11.2% 37%

12/5 193 $ 20,118 $ 104 - 1,083 17.8% 42%

12/12 133 $ 16,400 $ 123 - 951 14.0%  

12/19 55 $ 6,153 $ 112 - 894 6.2%  

12/26 28 $ 3,892 $ 139 - 864 3.2%  

1/2 57 $ 9,607 $ 169 - 804 7.1%  

BLK Total 845 $ 100,404 $ 112 1,655 938 7.8%  

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 Lightship Partners
•Lightship Partners LLC is a firm of business professionals and senior executives with
diverse yet complimentary skills and significant experience across industries and
functional disciplines.

•We support companies efforts to assure operational needs are identified and/or
addressed for short and long term productivity improvement, turnarounds or sales
and margin growth.

•We know each company and culture in a marketplace is unique. Our approach
begins with forming insight into your situation, providing guidance and executing
solutions based on your particular needs.

•We bridge the business–technology gap, aiding companies in maximizing their IT

investment.

•Hence, We offer our clients a “fresh eyes” independent situation analysis and
assistance in the development and execution of operations and technology
enhancements to improve top and bottom line growth.

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 Lightship Partners

We support stakeholders in their efforts to:

•Evaluate information systems or reporting effectiveness

•Identify expense saving opportunities without politics

•Enhance profit and cash flow by inventory planning, optimization and monetization

•Resolve problems associated with growth or with existing operational, business

process or infrastructure issues

•Integrate existing culture and company success factors with technology

implementations

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 Lightship Partners

The Lightship Commitment

•The nature and level of our assistance depends on the requirements of each
situation. We bring to bear the expertise required to address the opportunities or
issues.

•Initial engagements typically comprise a quick assessment of the situation and of the
Company’s resources followed by a review of our evaluation and recommended
action plan.

•Our approach and solutions are pragmatic. We take into account the Company’s
resources, the realities of its marketplace, its internal culture and existing operational
processes to formulate approaches which can be implemented; are attainable; and
prove sustainable.

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 Lightship Partners
We are a team of experienced senior executives providing services and training to:

•Improve financial and operational performance

•Enhance productivity and profitability
•Strengthen business intelligence, analytics and develop concise, actionable reporting
•Design and implement new business process and culture changes as needed
•Increase inventory optimization and product planning effectiveness
•Evaluate supply chain and logistics efficiencies
•Design and implement information systems enhancements

•Manage Projects and OPM’s

•Analyze expenses for reduction opportunities
•Contain, resolve, restructure or prevent crisis
•Fill voids caused by the unexpected loss of a Chief Executive, Operating or Financial
Officer

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Improving Your Margin at Retail
Contact Information:
Alan Barnett
Partner
Lightship Partners LLC

Cell (203) 253-6123

[email protected]
www.lightshippartners.com

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