Introduction
Coldwater purchases its merchandise directly from foreign manufacturers. The share of merchandise sourced directly from foreign manufacturers was increased from 15% in 2006 to 30% in 2007 to 50% in 2008. The company targets to increase this share to 60% by the end of 2009. This sourcing strategy is likely to reduce retail inventories per square foot by an average of 15%.
Scope
Highlights
Coldwater is planning to strengthen its business by taking initiatives such as opening new premium retail stores in 2009. It is also planning to target the key customers by shifting the focus of advertising spend from print and television advertising to point of sale.
In order to improve the inventory cost management and to improve the product offering, the company revisited its inventory management by bringing about changes such as increasing the sourcing from foreign manufacturers and reducing the number of stock keeping units in the stores.
Coldwater operates in three segments of the retail value chain: wholesale (procurement of stock), operations and distribution (warehousing) and sales (physical store operations, online sales) segments of the retail value chain. The company does not have presence in two other sections of the retail value chain: raw materials and manufacture.
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