Retail Buying & Merchandise Planning · The Season Plan
Merchandise Financial Planning
Every season starts as numbers: six months of planned sales, markdowns and stock — and the weekly routine that keeps the plan honest once trading begins.
Before a buyer looks at a single garment, the season has to exist as money. Merchandise financial planning is the process that creates it: a month-by-month statement of what a department intends to sell, what stock it needs to do it, and what it will cost in markdowns along the way. This page of the Retail Buying & Merchandise Planning Guide explains how the six-month plan is built, what each line means, and how the plan is steered once the season starts trading.
The Six-Month Plan, Defined
A merchandise financial plan sets out, for each month of a season: planned sales, planned markdowns, planned end-of-month stock, and the receipts (goods to be ordered and delivered) needed to make those numbers connect. Stock is the hinge: this month's closing stock is next month's opening stock, and receipts are whatever is required to keep the chain unbroken — sales deplete stock, markdowns devalue it, receipts rebuild it.
The Lines of the Plan
Planned sales start from history — last year's same month — adjusted for everything known to be different: trading days and holidays (an Easter that moves months can distort a comparison badly), planned promotions, new or closed stores, and the trend the department has been running. Sales are planned at retail value, because that is the language the whole plan speaks.
Planned markdowns are the season's honesty line. Every range will have styles that miss; every calendar has promotional moments; every season ends with something to clear. The plan funds those reductions in advance, spread across the months where they are expected to bite — light early, heavier at season transitions and clearance. The markdown strategy guide covers how those planned reductions are actually executed.
Planned stock is set as an end-of-month level for each month, shaped by the sales curve: stock builds ahead of peak months and is planned down hard into clearance, so the season ends lean. Planners sanity-check stock with stock-turn and weeks-of-cover thinking — the formulas live on the inventory turnover page — but the judgment is simpler than the math: enough stock to sell the plan, never so much that the plan becomes a warehouse.
Planned receipts are not chosen directly; they fall out of the other three lines. Receipts = sales + markdowns + planned end-of-month stock − opening stock. They are the bridge to open-to-buy: the receipts plan is the purchasing budget that OTB then rations order by order.
An Illustrative Season
The table shows the skeleton of a spring/summer plan for a mid-sized clothing department (figures illustrative, at retail). Note how stock builds toward the spring peak, then is planned down through the summer clearance months, and how markdown money concentrates where the season changes:
| Month | Planned Sales | Planned Markdowns | Planned End-of-Month Stock |
|---|---|---|---|
| February | $80,000 | $6,000 | $240,000 |
| March | $95,000 | $8,000 | $255,000 |
| April | $110,000 | $12,000 | $250,000 |
| May | $105,000 | $14,000 | $235,000 |
| June | $90,000 | $16,000 | $205,000 |
| July | $85,000 | $15,000 | $190,000 |
Nothing in the table is a promise; it is a set of connected intentions. Change one line honestly — say April sales are re-planned downward after a weak March — and the stock and receipts lines must move with it. A plan whose lines do not connect is decoration.
Steering the Plan: WSSI
Once the season starts, the plan is managed weekly through the document most British-influenced retailers call the WSSI — Weekly Sales, Stock and Intake. Each week it lays actual sales beside planned sales, actual stock beside planned stock, and the goods due in (intake, including everything on order) beside the receipts plan. Three drifts become visible early, while they are still cheap to fix:
Sales drift
A department running 8% behind its sales plan with stock at plan is quietly overstocking itself every week it does nothing. The WSSI forces the conversation while cancelling or delaying intake can still solve it.
Stock drift
Stock creeping above plan while sales hold usually means receipts arrived early or markdowns were not taken as planned. Either way, the end-of-season stock line — the number the next season's opening depends on — is now wrong.
Intake drift
Orders placed but not yet delivered are commitments. If the intake line shows heavy deliveries landing just as the season turns, the buying team can see the clearance problem being manufactured in advance.
The plan is then formally reforecast — usually monthly — folding actual results into the remaining months. Reforecasting is not failure; it is the mechanism that keeps the open-to-buy real. The failure mode is the opposite: a plan written in January, worshipped until July, and discovered in August to have been fiction since March.
Continue Through the Guide
Common Questions
Why is the merchandise plan usually six months long?
Six months matches the natural half-year rhythm of fashion retail — spring/summer and autumn/winter — and roughly matches buying lead times. It is long enough to plan stock flow across a whole season including the clearance period, and short enough that the sales forecasts are still meaningful.
What is WSSI?
WSSI stands for Weekly Sales, Stock and Intake. It is the in-season version of the merchandise plan, tracked weekly: actual sales against plan, stock on hand, and goods due to arrive (intake). It shows whether the department is drifting overstocked or understocked while there is still time to act, and it drives the open-to-buy recalculation.
What is the difference between top-down and bottom-up planning?
Top-down planning starts from the company's sales and profit targets and breaks them down to departments and categories. Bottom-up planning starts from the ranges themselves — styles, prices and quantities the buyers believe they can sell. A healthy planning process does both and reconciles the two until they meet; a plan that is only top-down ignores the product, and a plan that is only bottom-up ignores the money.
How are planned markdowns set?
From history and intent: last year's actual markdown percentage by month, adjusted for how much risk the new range carries (more fashion-forward ranges usually need more markdown money), known promotional events in the calendar, and the end-of-season clearance the business is willing to fund. Markdowns are planned, not discovered — a department that budgets no markdown money has simply chosen to be surprised.
Back to the Guide
This page is one of six in the Retail Buying & Merchandise Planning Guide — return to the hub for the full buying cycle, from the six-month plan to the final markdown.