In a retail environment increasingly characterized by mark-downs and higher trade promotion costs it's always encouraging to see retailers are managing to make a profit. The alternative is bad news for everyone that retailer deals with including all their suppliers.

An April 9, 2007 article in Woman's Wear Daily (WWD) titled "Margin Rates Robust in 4th Qtr." notes "Analysts said better inventory management, planned and more disciplined markdowns and robust gift card sales bolstered results." The article went on to say "In a research note earlier this month, Dorothy Lakner, equity analyst at CIBC World Markets, cited technology as one reason for American Eagle's 157 basis point gross margin gain. 'Investments in technology are helping American Eagle put more of the right inventory in the right stores and sell more of it at full price, eliminating the coupons of the past, ' Lakner said. 'Markdown optimization and size profiling are helping margins already, and further system improvements, such as demand forecasting, are in the wings, with further improvements to show up in 2008.'"

While vendor collaboration is not specifically called out in the article, improvements in inventory and demand forecasting will come at least partially as a result of sharing POS and EDI 852 data with suppliers and fostering an environment of collaboration. It is refreshing to see demand forecasting listed as a top priority for the upcoming year. Hopefully American Eagle will embrace vendor data sharing and collaboration as part of that process.

> return to Blog home