Seen & Heard: Marking Down Inventory to Clear Room for New Merchandise

At Barre, in Greenville, NC, communicates markdowns on fashion leos or athleisure wear via Instagram or Facebook.

When to mark down items can be a tricky business. New seasonal inventory and shifting trends can determine that it’s time to bring prices down on certain items, and then there are those pieces that just won’t sell. Keeping stock too long takes up precious shelf or rack space needed for newer or seasonal items and gives the store a dated feel. Well-planned markdowns get at least some return on already stale merchandise—freeing up cash to invest in newer inventory that will sell.

Several retailers share how they determine when to mark down products throughout the year—from small to deeper discounts—and when it’s time to remove them from the clearance rack for good.

Staying on Trend

At Barre

Marilyn Rosenthal’s store, At Barre, in Greenville, NC, marks down fashion twice a year, usually after the season’s end. “We like to have the latest trends in the store and move that inventory faster,” says Rosenthal. Clearance or sale items are typically kept on a special rack, so customers can easily identify them. In addition, if a particular line is not selling as well as others, “we may mark those items down during the holiday and other promotional times,” she says. E-mail, Facebook and Instagram are the most efficient avenues for communicating sales; each also includes direct links to At Barre’s online store.

Footlights keeps an eye on fashion pieces, using markdowns to move items that linger. (That’s Alexandria store Ambassador Kylie on pointe.)

Managing Inventory Turnover

Footlights Dance & Theatre Boutique

At Footlights, two factors determine when an item gets marked down: how long it has been in store and how many of it remain. If there’s just one of a specific style left in stock, it will be moved to the sale rack. “We try to keep an eye on the fashion items and make sure we are moving them through,” says owner Joy Ellis. “We will mark down regular-stock items if the sales are really slow for several months.”

Scanning sales racks is one way to check on what’s selling and what’s not. But Footlights, which has two locations in Maryland and one in Virginia, is hoping to initiate more scheduled markdowns for fashion by using a new POS system. “It will help us track the inventory turnover for these items,” says Ellis.

At Footlights, the size of the markdown usually depends on the item. Fashion in odd sizes may be marked down more than other items, according to Ellis, who says that they usually start with 10 to 15 percent off. Items lingering more than a month will drop 20 percent or more. Several times a year, Footlights will have clearance sales, marking items down $5 to $10. “We do have a clearance section, and our customers know where to find these items easily,” says Ellis. “Sometimes we will combine sale items with regular-price items to generate more interest in a rack. Hopefully they will pick out a sale item and a regular-price item.”

Blowout Sales

Gabie’s Boutique

Summertime and Boxing Week (at the end of December) are two times of year when Gabie’s Boutique of Newmarket, ON, can unload basics that didn’t sell the first time around. Fashion items will be marked down after each season, too. Says store manager Amy Manning of the retailer’s Boxing Week Blowout and Summer Sale: “This allows us to clear out old stock, and customers know they can score some incredible deals at this time of the year.” Basics are also marked down if the store is overstocked or they have decided to discontinue carrying an item. Sales are usually advertised on the store’s social media, with typical markdowns ranging from 10 to 15 percent, according to Manning. The retailer also keeps a clearance rack and shoes for sale at the front of the store year-round.

Sale rack at The Dance Shop in Altoona, PA

Social VIPs

The Dance Shop

Micki Samson of The Dance Shop in Altoona, PA, doesn’t have a system for marking down items. Instead, she simply peruses store reports when she’s doing her fall orders, and if there’s an item still hanging around, it gets the markdown treatment. “Unfortunately, I fly by the seat of my pants on this,” says Samson. The retailer does hold a semi-annual clearance event with a rack or table of merchandise; the remainder of the year those items are placed in their regular category with a markdown tag. Product is typically marked down from 25 to 90 percent (some as low as 99 cents). Whatever doesn’t sell is usually donated. E-mail and social media usually get customers in for sales, and Samson has even spotlighted specific items throughout the slower winter months. “This year we had a couple snow days where the store was closed, so I did some fun events on our Facebook VIP page, where I posted each item with an extra discount,” says Samson. “This was fun on days that no one was going anywhere because of the weather.”

Tina Benitez-Eves, a New York City–based writer, is a regular contributor to Dance Retailer News.

Photos: by Eric Jones, courtesy of At Barre; courtesy of Footlights Dance & Theatre Boutique; courtesy of The Dance Shop

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