Planning Stock vs. Fashion
by Matt Pruitt
Not all merchandise planning is the same, because not all merchandise is the same. One of the biggest differences we see in planning for apparel stores is the distinction between stock merchandise and fashion merchandise. Stock merchandise is usually made up of basics such as T-shirts, basic bottoms and hosiery — the kind of items that people need to replace on a regular basis. Fashion merchandise, on the other hand, is the kind of stuff that people want, rather than need, and is made up of clothing that is usually trending, such as jackets, designer denim and dresses.
Fashion merchandise is usually bought up front because it’s harder to reorder it in-season. We recommend that our merchants buy around 80% of their fashion merchandise at the beginning of the season, and leave 10% to 20% of their open-to-buy for fill-in orders later on.
Stock merchandise, on the other hand, is much easier to replace, so you can order it as needed. And, even if you are over-inventoried, stock merchandise can often be carried over to the next season because it has less chance of going out of fashion.
So, fashion merchandise is more of a gamble, but it usually comes with greater rewards in terms of margin. Stock merchandise is somewhat easier to buy, but you still have to pay attention to color and other small details to make sure that it is on trend for its category.
There are times, however, when stock merchandise seems to slip into fashion categories, such as with designer tees and sweatshirts. The recent “Althleisure” trend of expensive, athletic-inspired clothing is a great example of what’s typically thought of as stock merchandise actually being fashion.
Just remember, no matter how hot an item is, if it’s refillable it is still considered stock. This means that if you run out of an item you can reorder it and have it back in stock within a few days. If you can do this, no matter expensive and trendy an item may be, it’s still stock merchandise.
In really high fashion stores (that aren’t clothing stores that offer stock suits) everything they carry can fall into the fashion category because it’s unique and cannot be replaced immediately, if at all.
But there’s definitely a benefit to carrying both — Fashion brings greater margin, but a little more risk, while stock offers more consistent margins and not as much capital outlay upfront.
If you have further questions about how to plan your inventory in these categories, please feel free to give me a call.
For more information, contact Matt Pruitt at firstname.lastname@example.org or call (781) 325-6751.
Matt Pruitt is a retail consultant and data analyst at Blacks Retail. His expertise in vendor performance, point-of-sale analytics, and growth strategies has helped clients achieve and exceed their goals. He studied Business Management and Philosophy at the University of Massachusetts, Boston.