It always helps to have a point of comparison – for anything. Stores compare themselves to competitors and non-competitors with indicators such as sales per square foot or gross margin.
For example, from 1993 to 2008, gross margins improved for women’s clothing stores. 1993 gross margins were 36.9 (percent of annual net sales) and they inched upward to end at 46.1% in 2008. There was a high of 49.9% in 2006. It will be interesting to see the numbers as sales are affected by “the worst depression since the Great Depression”.
It is also interesting to note that classic profit and loss teaching examples place the gross margin as high as 50 per cent of net sales. That could be very misleading. In FSHN 2305, we typically use a 40% gross margin in our beginning examples. This cost/margin ratio helps us keep our expenses in check and it gives our stores a chance to earn a PROFIT!
Men’s clothing stores earn a higher per cent of gross margin dollars than women’s clothing stores. This tells us that it takes more of the net sales dollars to sell clothing to women (which may come as a surprise to many.) This is the type of data one needs to be a success. If you know that men’s clothing stores posted gross margins of 42.3% in 1993 and rose to 52.5% in 2008, with a high of 53.5% in 2004, well, you know a lot. And that lot can provide you the brain data you need to make decisions that are based on the numbers.
Discount department stores grew their gross margins 7.2 percentage points from 1993 to 2008, however, they start with gross margins of 22.5% (Can you say, “If gross margin = 22.5%, cost must = 77.5%”, girls and boys?) The discount stores end 2008 with gross margins of 29.7%. The discount department store gross margin high in this fifteen year time period was 30.9% in 2004. And that is precisely what makes them discount stores, the cost/margin ratio.
Play around with some calculations to see how different the expense and profit dollars could be with these various gross margins. Set a net sales volume (i.e. – $1,000,000 or $1,000.0 in financial notation) and quickly compare gross margin dollars.
Check out the many sources of good statistics and remember a statistic is only as good as it is true, useful as it is understood, and profitable as it is made to create value.
The websites listed here are all linked many times in the LinkList, find them for sure under links categories FSHN 2303, FSHN 2305, and Retail.
There are many links on each of the following sites. We can find anything we need. Keywords are the toolmakers.
For many links and general definitions follow these links.
Now, check out Opto, a great site that sells floor fixtures to the retail industry. They have sample floor plans that are interactive. Click on a sample plan and run your cursor over the store’s fixtures and you will see the name of that fixture highlighted on a list to the right of the plan. Linger over a particular fixture, or click and you will see views from three angles and detailed information — product specifications, dimensions, descriptions, footing, accessories.
Finally, this post was created in honor of the hard-working EPCC fashion technology students who stayed late night after late night or worked long hours at home to Learn More. And if you think it took a long time to read this post, imagine how long it took to create. So as a final tribute to hard work, might we remind you, when you create in your wordpress.com blog, you have a great text editor so use those shortcuts,
“While blogging and using the wordpress editor, most basic keyboard shortcuts work like other text editors. For example: Shift+Enter inserts line break, Ctrl+C = copy, Ctrl+X = cut, Ctrl+Z = undo, Ctrl+Y = redo, Ctrl+A = select all, etc. (on Mac use the Command key instead of Ctrl). See the Hotkeys tab for all available keyboard shortcuts.”
Have a great day!