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The Parker Avery Group is a boutique strategy and management consulting firm that is a trusted advisor to leading retail companies. We specialize in solving merchandising, supply chain, store operations and multi-channel commerce challenges. We combine deep experience and thought leadership with proven consulting methodology to deliver world-class results for our clients.

A B C

Basic Fashion Basic Fashion

Reg+Promo Life 52 weeks 14-39 weeks 9-13 weeks

Total Sell-Thru % Tgt Feb BOP 80% 80%

Life Sell-Thru % NA 100% 100%

Fill/ Service Level thru Reg/Promo Life

95% 90% 80%

Chase Strategy Chase Chase No

# of Markdowns NA 3 3

Cadence b/w markdowns NA 4 4

Suggested MD % off NA 25 – 30% 30 – 40%

35 – 50% 40 – 60%

50 – 75% 60 – 75%

Sell-Thru % Experience NA 1st = 55% 1st = 55%

2nd = 35% 2nd = 35%

Final = 10% Final = 10%

Max # of weeks @ Markdown

NA ~10wks ~10wks

client A $15B+ specialty retailer of hardlines and softlines with multiple channels, store formats and brands. Focus was on the softlines business (~$500M).

Improving margin by establishing better markdown management through rule-based framework, training and reporting.

challenge

The retailer was transforming its softlines business, and a large component of the expected business benefit would come from shifting clearance margin to regular/promo and increasing the clearance margin rate through better markdown management. Challenges in the current markdown process included:

• No seasonality visibility • Limited markdown rules in

place • Markdowns taken at

national level • No integration to

merchandising or marketing calendars

• No visibility or control at item level after first markdown

• No “what if” capability

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Markdown Strategy:

parker avery solution

The Parker Avery Group helped the client address the challenges identified in the current state by recommending six initiatives:

1) Establish a markdown rules framework by product type

2) Add markdown rules to the assortment planning process

3) Improve reporting to provide visibility to markdown performance

4) Implement rule-based, localized markdown capabilities

5) Establish a markdown training program for merchants and planners

6) Implement markdown optimization

results

As a result of the project, the client expects to achieve the following benefits:

• +3% shift from clearance to regular/promo margin

• +1.3% clearance selling margin rate

• Maximized sales • Improved sell-thru

Seasonal Pricing Parameters