1. Given the soft-goods targets, are these marked correctly? If not, what should the initial retail price be to obtain her 60 percent minimum initial markup percentage?

2. By noon another shipment arrives. This time it is from SNEAK HERS, delivering her preholiday sneakers. Elise notices that the high tops do not have tags and need to be priced for the floor. She has her associate calculate the retail price. The invoice indicates the cost is $8.75. What should the initial retail price be, given her markup target?

3. Elise has been analyzing her sell through and saw that the “hot” T-shirts from back to school have not been moving, and she has sweater shipments due in the next two weeks. She decides to mark down the T’s to make room for the anticipated shipment. The cost of the T’s was $2.25, and they were on the floor at a 62 percent markup. If Elise takes a 33 percent markdown, what is the new selling price?

4. After six weeks passed, Elise analyzes her sales of the FUNWEAR prewashed jeans. Of her original 200 units this is what she found:

50 units sold at the original retail

34 units sold at a 38 percent markdown

116 units sold at a 44 percent markdown

What was her average maintained markup percentage? Did it meet her goals? Explain how this was possible.

5. Using the information in question 4, explain to management the possible reasons multiple markdowns could have been taken and why we compare to plan.

6. FUNWEAR is a long-time vendor of Mel’s. It provides markdown dollars to help defray the lost gross margin dollars. Why would it provide this money to Elise?

7. Seventy-five toy trains were bought for the toy area at $3.50 each and were then priced at $10.00 each. Elise is running a department promotion and wants to reduce the price of the trains. To what can she reduce the retail price in order to meet her maintained markup goals?

8. Mel’s wanted to create unique assortments and increase customer service. How does this strategy allow for better markup percentages? How are these related to perceived value?

Synopsis:  A new department store manager learns firsthand about markup and markdown in different departments and how her assortment and overall retailing strategy affect these day-to-day tactical decisions.