Thread regarding Sears layoffs

Margins don’t matter if the merchandise is slow to sell

ounds good until you realize that most of that stuff is slow to sell. Margins don't matter if that stuff isn't selling. We still have over 90 unopened boxes of soap from two years ago sitting in one of the stockrooms. We've got etageres of soap at both softlines cash wraps, in our home department, in appliances and even in tools. We've got purses, lots of purses. They do sell a little better but they send us way more than we need, so, we have way more purses than we have space or fixturing. The purses are crammed in because everything has to be on the floor. The only reasons why we were allowed to have 90 boxes of soap in a stockroom was because even the district manager agreed that it was unreasonable to have 90 boxes worth of soap out on the floor (at 24 per box), but I'm sure there will be a point in time that we will be allowed to back stock purses.

I remember when they were bringing in weird c-ap like hotdog toasters and beer making kits during fourth quarter. People still didn't bother buying any of it even when the holidays were long over and all that stuff was marked down to practically nothing. The majority of whatever came was sent off as MRN and the sad thing was it all came back the very next year. Lots of the same old clothes, usually Laura Scott or Metaphor, same thing. Get a ton of it in, it sells poorly, it starts to go on markdown, it still sells poorly, it gets pulled off the floor and sent back to the DC, only for the same or similar things to come boomeranging right back on our freight a few months later

Originally posted by @VMm34a5-1urv . Maybe a little of topic, but this post clearly shows some of Sears’s flawed policies. Pile up the merchandise- no sales- mark down until it’s worthless.

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Post ID: @OP+VN6erkN

4 replies (most recent on top)

@VN6erkN-bto Margins matter as long as the product can move. You could have a product with a 99% margin, but if it never moves, it does nothing.

If there is so much of this high-margin product that whatever is out on the floor moves at a glacial pace and there are 90 boxes more of it waiting for several months up to two years of being replenished because of its very poor selling performance, that product becomes a liability on the books. First, the investment was never really realized and second, that product is going to have to take some markdowns just to get it to move (markdowns reduces margins!), and sometimes, even serious markdowns will not do the job, hence, Sears gives up and it rolls to zero in the system. So, it will end up being sold wholesale to discounter who will most likely buy it below cost. In a couple of months you will see it at some other retailer that can do a better job of moving that specific product. So, so much for margin!

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Post ID: @1djd+VN6erkN

Margins ALWAYS matter.

No wonder Sears is in trouble if you lack the basic understanding of retail math.

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Post ID: @bto+VN6erkN

We still have a pallet of toasters we were sent two years ago. For some reason they thought our store would sell 300 toasters over the Christmas 2015 season. We asked to send them to other stores but we couldn't. We also have a pallet of fragrance gift boxes that did not sell last year and we weren't allowed to send that back. Can't wait to see what is in the back of the warehouse we will receive this year. Maybe 500 tamaguchi pets. I hear they are a thing.

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Post ID: @atk+VN6erkN

We've taken so much from our stores we'll never have to buy any household goods again. Thanks Eddie, you showed us how to loot.

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Post ID: @gbc+VN6erkN

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