Glossary
Dead stock
Stock that has stopped selling: lines with no sales in a period, or with so much cover they will not sell through this season.
Formula
Dead stock value = units in stock × cost per unit, for lines with no sales in the period or more than six months of cover
Worked example
A knit has 90 units at £18 cost and has sold none in eight weeks. It holds £1,620 of dead stock at cost, and £6,300 at its £70 retail price.
In fashion, footwear and sportswear
Value it at cost and at retail. Cost tells finance what is tied up; retail tells trading what a clearance could bring in before the markdown.
Where it misleads
A line waiting on a delayed launch or its own season, such as swimwear in winter, is not dead. Check the calendar before you clear it.