Negotiating a $5 Million Sweater Program

Overview

As the Petite Buyer at Ross, I led a strategic negotiation initiative to sustain and protect our sweater program amidst post-COVID challenges. By leveraging data-driven insights and fostering strong vendor relationships, I successfully negotiated a $5 million buy that maintained our average unit retail (AUR) and secured healthy margins, ensuring the program's stability and market share.

Context and Objectives

Post-COVID, Ross faced financial constraints with stretched dollars, making clothing a lower priority for consumers. Our sweater program spanned multiple categories: Petite, Missy, Plus, and Maternity. With competitors aggressively targeting this product line, it was imperative to protect our business. The closure of a key supplier left a gap, especially in the Petite segment, as vendors typically did not offer petite-specific lines. The primary objectives were to fill the $5 million sales gap, secure a healthy margin, and protect our sweater program from competitive threats.

My Role

As the Petite Buyer, I:

• Data-Driven Analysis:

  • Pulled sales data from all business areas to identify best-performing styles and colors.

  • Researched emerging market trends, including new colors and rhinestone patterns, to inform product development.

• Stakeholder Coordination:

  • Organized alignment meetings with stakeholders, GVPs, buyers, and assistants to agree on styles, yarns, and colors.

  • Prepared resources and led the project from start to finish, ensuring alignment and execution across all business areas.

• Strategic Negotiation:

  • Leveraged sales volume across businesses to negotiate favorable terms with vendors.

  • Employed emotional intelligence to understand the vendor’s priorities, fostering a mutually beneficial negotiation.

• Volume Leveraging and Diversification:

  • Coordinated shipping timings and color allocations to diversify store racks, avoiding overstock of similar styles or colors.

• Vendor Relationship Management:

  • Utilized established rapport with the vendor to negotiate terms that maintained AUR and healthy margins.

  • Ensured the deal was beneficial for both Ross and the vendor, preventing the vendor from switching to competitors.

Challenges and Solutions

• Financial Constraints and Price Sensitivity:

  • Challenge: Consumers were reluctant to spend on clothing during stretched economic times.

  • Solution: Negotiated bulk discounts and favorable payment terms to maintain competitive pricing without compromising quality.

• Supplier Gap:

  • Challenge: Limited supplier options for high-quality, petite-specific sweaters.

  • Solution: Partnered with a trusted vendor to fill the gap, ensuring the new line met quality standards despite the vendor’s low-cost reputation.

• Protecting Market Share from Competitors:

  • Challenge: Competitors were aggressively targeting our sweater program.

  • Solution: Secured a $5 million buy through strategic negotiation and volume leveraging, protecting our program from competitor encroachment.

• Maintaining Healthy Margins:

  • Challenge: Ensuring the program remained profitable while addressing supplier and consumer challenges.

  • Solution: Conducted line-by-line negotiations to achieve overall healthy margins and maintain profitability.

Results

• $5 Million Buy Secured: Negotiated a substantial $5 million purchase that sustained the sweater program's revenue.

• Maintained and Exceeded Program Margins: Ensured the sweater program met or surpassed planned margins, contributing to overall profitability.

• Protected Market Share: Safeguarded Ross’s market position in the sweater category by preventing competitors from gaining market share.

• Strengthened Vendor Relationships: Continued a trusted relationship with the vendor, ensuring future collaborations and consistent product quality.

• Successful Program Continuity: Maintained a diverse and appealing sweater assortment, meeting consumer demands and enhancing customer satisfaction.