Recovery of 4 gross margin points in a footwear chain.
The challenge
The chain was suffering continuous margin erosion due to aggressive markdown policies and lack of control over product costings. Gross margin had fallen from 52% to 46% over three fiscal years.
The strategy
- 1
Complete review of costings: renegotiation with 8 key suppliers and search for alternative sources.
- 2
Implementation of a phased markdown management model with activation rules based on weeks of cover.
- 3
Training the buying team in negotiation techniques and landed cost analysis.
- 4
Development of a margin control dashboard with automatic alerts by category.
The results
Gross margin recovered from 46% to 50% (+4 percentage points).
Markdown loss reduced by 40% compared to previous fiscal year.
Estimated annual savings of €320K in product cost.
Buying team trained and operating the new model autonomously.