Stag…lol they did not buy each size equally. But what they did do is make assumptions based on the size of the prize, ie how many women in the US wear the extended sizes, what percentage of the buy the extended sizes should be. IE instead of saying historically size 28 is 2% of our sales, we know that size 28 is 10% of the market (all numbers are hypothetical) so let’s place this buy at 6%. All retail buying is part science (math) and part art. Unfortunately while they did increase the number of new customers, it was not enough to offset the losses that they incurred by carrying less of the middle sizes. Remember inventory is the largest expense a retailer has, and so you need to balance the total of what you buy. Also the physical stores did not get larger, so they still needed to fit all of it into the same size stores, so again you can’t just by more than you did in prior years. In addition it’s really hard to know what store need to stock more 28s if you haven’t sold much of that size before, so you are making a lot of educationed guesses.
Robin, if Wall Street and the investors continue to react like they did to this sales and margin drop, I’m not sure any other retailers are going to try this on this scale. That’s my takeaway from this article
