In this paper we test the predictive power of abnormal inventory growth to forecast retailers’ earnings. We demonstrate an inverted-U relationship between abnormal inventory growth and one-year ahead earnings per share for retailers. We find this relationship to be robust to different measures...

Many retailers are reducing store footprint and downsizing their assortments accordingly to improve store productivity. Some of the revenue for items removed from the assortment may be recouped by substitution, but also some of the revenue for items kept in the assortment may be lost due to...

Excess inventory announcement is an important issue as it has a huge negative impact on stock returns of the announcing firm. Many firms claim that they announce the buildup of excess inventory because of external factors such as sluggish sales. In contrast, theoretical literature in operations...

Attracting shoppers to stores and converting the incoming traffic into sales profitably are vital for the financial health of retailers. In this paper, we use proprietary data pertaining to an apparel retailer to study the relationship between store traffic, labor, and sales performance. We...

This paper shows the benefits of high inventory turnover in responding to demand shocks. We identify quantity- and price-responsiveness as two mediating mechanisms that distinguish how high- and low-inventory-turnover retailers (HIT and LIT retailers, respectively) can manage demand shocks....

Using a novel data set from 75 stores of a department store retail chain that changed its incentive plan for store managers to spur greater cooperation among them and with the corporate office, we examine how incentives impact operational decisions and, consequently, store outcomes. We measure...