Hibernation is a word I’ve not heard for some time, probably since Primary school. It conjures up images of hedgehogs and squirrels hunkering down for the Winter, bellies full and ready for a long cosy sleep ready to awaken in the Spring to a new start. It always sounded very appealing! Hibernation in the last few weeks has come to mean something entirely different when M&S declared they were going to put lots of their SS20 stock into “hibernation”. Mainly basics that wouldn’t date locked away securely and safely, ready to be brought back out in SS21. Next followed suit and it is estimated that 15% of their SS21 buy will be made up of SS20 product.
Is it the right thing to do? Absolutely! If you do not need to liquidate the stock into cash and can keep the stock in saleable condition, keep it and plan it in as part of an upcoming range. And that it the key phrase in all of this “Plan it In”. I am a firm believer that all lines of product should be profiled as to the role they play within your business. What do I mean by that… I think there are two very simple ways every Retailer should profile their stock. You can add more finesse but as a minimum this will do it.
Is your line a core line – is it very predictable in terms of it’s forecast. Is it likely to roll on for Seasons with little need to change it. (as in the M&S example of keeping basics in hibernation ready for next year).
Is it Heat? Is it there to service a trend or a moment in time. Think the bright acids around at the moment. How long will they be around? These are the lines that unfortunately are likely to need to be discounted to clear before the end of the Season.
So back to the point on planning it in. Your planning tools should include the hibernated stock (on Buygrids, line plans etc) These lines are just as important as anything you are buying in as new and you need to ensure you don’t buy into anything that could potentially cannibalise sales. You should also ensure your open to buy includes this stock so you do not overbuy for the upcoming season.
Covid-19 is forcing the conversation on excess stock and planning. A conversation some might say it well overdue. Watch out for more blog posts coming soon.