What is happening: The beauty retailer, Ultra, has moved e-commerce orders to a new warehouse in California, and are now transitioning into an omnichannel supply chain.
Warehouse: The special omnichannel warehouse opened in July and serves 173 stores. It also handles 21% of all e-commerce Ultra orders.
Stock: Ultra attempted to lower store-to-store stock this season with a clearance sale. This allowed it to keep store volumes lower, while growing overall inventory by 10%. By keeping a tight rein on stocks, companies can avoid regular waste and clearance sales.
Q4: With Q3 figures warped due to the transition, Q4 will be the first chance to see how successful Ultra’s new plans are.
What did CFO Scott Settersten say: “[We are on a] multi-year path where inventory optimization is going to be a significant driver of operating margin improvement in 2019 and beyond. We feel great about our inventory position.
“It took us longer than expected and we took deeper markdowns than expected, to sell through the discontinued inventory to clean up our back rooms, to get our stores ready for all the great new launches ahead of holiday. While the clearance event did pressure marginally more than planned, we’re happy with the end results and are in great shape for Q4.”