RETAIL TIP: What are Your Product Category Financial Profiles?
As published in OIA WebNews 10/21/2009
©2009 Outdoor Industry Association
Specialty outdoor retailers can gain invaluable knowledge and control of their products and business by tracking sales, gross margin and inventory turnover and benchmarking these key performance indicators against the financial data and ratios provided in the Outdoor Industry Association (OIA) 2009 Retail
Financial & Operations Benchmarking Report .
There are nine primary outdoor product categories. Using the report's benchmarks to craft your annual plan, and comparing each category’s actual performance on a weekly and monthly basis to your plan will provide you and your staff the critical information you need to make the changes and adjustments necessary to keep your revenue and profitability on track for the year.
According to the OIA 2009 Retailer Financial & Operations Benchmarking Report, the typical outdoor retailers’ top three revenue producing product categories are: (1) Apparel = 35.4 percent of revenue;
(2) Equipment (excluding ski & snow sports) = 19.6 percent of revenue; (3) Footwear = 11.1 percent of revenue.
Consistently achieving realized gross margin targets is critical to overall profit performance, and the OIA report shows the typical retailers top three gross margin (GM) product categories are: (1) Equipment
Accessories = 43.9 percent GM; (2) Footwear = 42.3 percent GM; (3) Apparel = 42.2 percent GM.
Inventory turnover is the last key performance indicator making up your product profiles. The OIA 2009
Retailer Financial & Operations Benchmarking Report shows the top inventory turnover for the typical retailers is in three product categories: (1) Equipment (excluding ski & snow sports) = 2.9 inventory turns; (2) Apparel = 2.9 inventory turns; (3) Equipment Accessories = 2.8 inventory turns.
The OIA 2009 Retail Financial & Operations Benchmarking Report is available at no charge to Outdoor
Industry Association members and available to non members for $495.
Contributed by Jay Townley, Gluskin Townley Group. Questions or comments can be directed to jay@gluskintownley.com.
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