Nordstrom and Macy’s abandoned the ‘retail inventory method’ after using it for decades. Here’s why.

Quick Summary:

The accounting practice, embraced by department stores in the 1920s, is outdated, skews key metrics and fosters bad decisions, analysts say.

This fiscal year at Macy’s, due to the conversion to cost accounting, neither gross margin nor inventory have been directly comparable to prior periods, contributing to a year-over-year gross margin beat in Q2 but a miss in Q3, executives said this month.

Trading in RIM for a cost method is a daunting task, entailing an overhaul of accounting, inventory management and buying that affects operations and financial reports.

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Article Details

Author / Journalist: Daphne Howland

Category: EconomyBusiness

Markets: United States

Topics: Value Item According Markdown Based Method Retail Accounting Retailers Inventory Cost

Source Website Secure: Yes (HTTPS)

News Sentiment: Neutral

Fact Checked: Legitimate

Article Type: News Report

Published On: 2024-12-16 @ 09:00:00 (20 hours ago)

News Timezone: GMT +8:00

News Source URL: retaildive.com

Language: English

Article Length: 2458 words

Reading Time: 14 minutes read

Sentences: 82 lines

Sentence Length: 30 words per sentence (average)

Platforms: Desktop Web, Mobile Web, iOS App, Android App

Copyright Owner: © Retail Dive

News ID: 24436458

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