As discussed above, inventory can be seen as an asset or a liability. Bankers and accountants typically view it as an asset. A merchant, however, may see the same stock as a liability. Age is the key. As mentioned above, leading retailers have a monthly review process to understand the age of their inventory. Age […]
INVENTORY – an ASSET or a LIABILITY Read More »
Maintaining a healthy balance sheet is critical to any business. In retailing, a significant portion of the finances raised to fund the business may be secured against the assets in the company’s balance sheet. There have been well known instances of large retailers with severe inventory problems who were forced to overstate the true inventory
Balance Sheet Management Read More »
Depending on the real estate market for retail locations, retailers can occasionally attract reverse premiums for vacant retail stores. In other words, when a retailer is considering a move, real estate companies might pay them a sum of money to encourage the retailer to leave their current site and move into another that is listed
Dealing with Reverse Premiums Read More »
Adding new stores is an important way of growing a retail business. However, it is important to realize that new stores take three to five years to reach maturity and in their first year or two, they may be unprofitable. Hence the rate at which new stores are opened requires very careful planning. In addition,
Adding new stores and the implications for profitability, cash flow Read More »
Store management also requires effective reporting. Stores today are confronted with shrinking budgets and demands for higher productivity. Managers have little time to spare for reviewing reports and completing paperwork. As actionable reports have been introduced to the merchants and corporate staff, store line reporting must also evolve in the same way. Each store should
Managing the store at the trading statement level Read More »
As discussed above, weekly and monthly analysis is important to review actual performance vs. planned expectations. The objective being to recognize potential problems and issues before they become threats to the company. There is a variety of danger signs to watch for when reviewing performance, these include: • Unplanned and continual decreases in comp store
Financial danger signs and how to avoid pitfalls Read More »
Retailers raise Purchase Orders (POs) and send them to vendors. Goods shipped to the retailer by the vendor are accompanied by a shipping manifest. Upon arrival, the retailer normally checks off receipts against the shipping manifest to identify discrepancies. At some later point, the retailer invoices the goods. To pay the invoice, retailers retrieve the
Weekly and monthly performance reviews are essential to smart retailing. A standard set of reports should be designed to best meet the needs of the intended audience. While this is considered standard practice for most retailers, it is only the beginning. Leading companies have redesigned these reports from information to be reviewed, into actionable reports.
Monday Morning and the end of Month Read More »