While some in the auto industry are adding a little slack to their inventory levels as a way to avoid production disturbances, apparel brand Under Armor has decided to fight the ill effects of the pandemic by “tightening” its inventory. According to Supply Chain Dive, CFO David Bergman and CEO Patrik Frisk announced in a quarterly results phone call that they were cutting SKU’s and consolidating vendors in an effort to improve operation margin, something they had experimented with in the past. Some low demand articles are being eliminated as the company focuses on bringing the right quantity of fast movers to the right places, all while dealing with a 69% increase in e-commerce sales year over year. The CEO and CFO say the initiative has paid off and translated into better-than-expected Q1 margin levels, thanks fewer promotions and increased average sale prices, which helped offset the higher cost of transport and logistics. If Q2 numbers should dip as a result of global freight container availability issues, the company plans to continue forward with its policies of tight inventory levels for the foreseeable future.
Photo ©Under Armour
Source: Supply Chain Dive
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