The Problem of Over Supply

(2018/07/21) For many, it's hard to imagine that business rather burning their over-production items than selling those at its salvage value. But for some firms, burning inventory is the best way to avoid "brand devaluation."

"Burberry, the upmarket British fashion label, destroyed unsold clothes, accessories and perfume worth £28.6m last year to protect its brand."

Analyst Calls Fire At Gap Distribution Center “A Fortuitous Reduction In Inventory”

(10/06/2016) Well it is embarrassing. Gap's warehouse in NY got fire last month. Normally this type of disaster to business causes various degree of damage. But  an analyst thinks that fire will be just fine to Gap since their sales was down over the years and the fire may just slashed some unwanted inventory level. However, WSJ had a report saying that the fire will slow down the delivery of Gap's online order. In fact, the share price of Gap just jumped more than 14% today, so maybe the analyst's perspective is correct.

Microsoft Is Conservative on Surface 2

(12/18/2013) Once burnt, twice shy. Microsoft's revenge product -- Surface 1st generation -- costed $900 million USD charge due to product glitches and overstock. This time, Microsoft's Surface 2 is sold out in many retail stores. The reason it is sold out is because Microsoft is conservative with its production and inventory. Surface 2 received positive reviews and the app crashing and dropped Wi-Fi issues have been improved. With conservative production forecasts, at least Microsoft does not have to be forced to write off inventories or has huge price-cut.

Stockout on Purpose?

(9/23/2013) Do you think sometimes business let stockout happen on purpose? Yes, it can be. Lululemon "circuitously admitted" that the plus-size clothes do not belong to their target market. Plus size customers cannot easily find their clothes in Lululemon because there is not much in their stock. If you are lululemon's customer, have you noticed that there is no much plus-size clothes there? Is this market positioning a correct strategy to business? What about Lane Bryant's targeting on plus-size market?