The Monday markdown meeting reads a revenue report that is up 6% while gross margin is down 2.1 points. A one-page readout puts gross margin and weeks of supply beside each decision, with a rule for when to cut price.
The merchandising lead decides every Monday which styles to mark down and how deep. The rule is to mark down any style under 40% sell-through by week eight, read off a revenue report against last year. It feels fine because the report is up 6%. The report shows sales, not what is left of them after markdowns and returns, and sell-through alone cannot tell a slow style from one that is simply early.
We name the baseline. The revenue report and the 40% trigger stay in every comparison, decision by decision, across a full season of Mondays.
We write down the expectation before the data is opened. A real share of markdowns should land on styles with fewer weeks of supply than weeks left in the season.
We build the readout and its rule on the spring season. Each eligible style shows gross margin after markdowns and returns, sell-through, and weeks of supply against weeks left. The rule holds price on any style on pace to sell out.
We freeze the rule and write down a forecast that 84% of held styles sell out at full price. Then we judge it once on the fall season. Of the 164 on-pace styles the buyers happened to hold, 81% sell out.
We try the simpler way. Dropping the trigger from 40% to 30% sell-through still marks down 241 of the 372 on-pace markdown decisions.
We hand back the one-page readout, the decision rule printed at its foot, and a monthly tie-out to the finance close.
Revenue is up 6% on last fall while gross margin after markdowns and returns is down 2.1 points.
So what The Monday meeting needs margin on the page, because revenue alone reads as a good season.
$310,000 of the season's $1.62M lands on styles already on pace to sell out.
So what That is the margin the rule puts back in play, if the test cell confirms it.
In every monthly close of the season it sits within 0.2 points of finance's gross margin.
So what The room argues about the decision, not about whose number is right.
The merchandising lead runs the Monday meeting off the readout and marks down only the styles the rule flags. The decision and the reason are logged against each style. For one season, styles where the old trigger says cut and the new rule says hold are split at random. Half are held and half are marked down, so the margin difference is measured instead of assumed.
The 81% comes from styles the buyers decided to hold, not from a random draw, and they may have held their best bets. The test cell removes that choice.
Some of those units would have needed the markdown late in the season anyway.
A season with a weather shift or a supply delay moves weeks of supply, and the rule has been judged on only one.
We'll tell you what your own history can say about it, and which offering fits. If none does, we'll say that too.
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