Page 184 - DMGT550_RETAIL_MANAGEMENT

Unit 10: Inventory and Product Availability Levels

Notes
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Case Study Castle’s Department Store

astle’s Department Store, which has an an-nual sales volume of $120 million, is
located in Atlanta, Georgia. The climate there usually ranges from mild to hot
Calmost all year long, with a few cold days during the winter months. The average
annual temper-ature is an ideal 70 degrees Fahrenheit. These conditions are perfect for
most sports, and tennis in particular, which has become the number one sports activity
among young professionals in Atlanta.
While much of the area surrounding At-lanta is still agricultural, such big industries as
textiles, technology, paper, chemicals, pharmaceuticals, as well as all media-re-lated
industries, such as television, radio, and publishing, are becoming a larger part of the
area’s economy. All in all, the influx of a younger, more professional population and their
growing families has been good for Castle’s. This change in the demograph-ics of the area
has brought a younger, more affluent group of customers to the store and has required
that the store’s management “think fashion” somewhat differently than its competitors
because Castle’s has always been known as “the best apparel store in town.”
Kate Butler has been Castle’s women’s sportswear buyer for the past three years. She is
very happy at Castle’s, is doing a good job, and is well thought of by upper management.

During the annual Atlanta Womenswear market, Kate bought something new for Castle’s—
an off-white tennis dress with lace details for non-tennis players—really an après tennis
outfit. Previously, similar dresses had sold very well in smaller markets and had done
especially well at the shops at private country clubs. Kate just knew that this dress would
be a hit and so she bought it. When the merchandise arrived, she first called the visual
merchandise department and arranged to have a mannequin display placed at the entrance
to her department. When the display was in place, she and her assistant finished ticketing
the goods and then they arranged a good-sized sample as-sortment on a T-stand next to
the display. When Kate looked at the display and the as-sortment, she knew she would
have a “hot” seller in no time. She was considering the possibility of advertising the dress,
when Janice Reed, the junior dress department buyer, stormed into her office.
As it happened, the location of the dis-play and the T-stand abutted one side of the junior
dress department. Janice had practi-cally fallen over the display and new mer-chandise,
and after looking it over, strode into Kate’s office.
“Hey, Kate, where do you come off sell-ing those off-white dresses in the sportswear
department? You’re practically flaunting them in my face!” Janice said angrily.
Kate looked at Janice calmly. “If you’ll look closely, you’ll see that they are not re-ally
dresses at all. They are tennis dresses, as their labels clearly state. I bought them from Miss
California, one of my key resources.”
Janice persisted. “Well, it’s bad enough that you’re carrying them right next to my
department, but they’re also priced $10 lower than similar dresses that I’m over-stocked
with already!”
“Janice, you know that sportswear prices are generally lower than dress prices,” Kate
answered. “You know they have a lower cost and sportswear workmanship is not as
costly as dresses are. Why don’t you just sit down and I’ll go get us both a—” Kate abruptly
stopped when she saw that Jan ice’s face was red with anger. She saw those ten-nis dresses
Contd....

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