The document outlines a comprehensive merchandise financial planning framework for retail, detailing processes for net sales forecasting, retail space planning, and inventory management. Key steps include aligning sales history and forecasts with operational needs, determining space allocation based on efficiency and profitability, and developing inventory and assortment plans. The ultimate goal is to create an effective buying budget and inventory management strategy to meet financial targets across various retail categories and regions.

1. MERCHANDISE
FINANCIAL
PLANNING
FRAMEWORK

2. Retail Merchandise Planning Model
1 3 5
2 4
Retail Sales
Planning
Merchandise
Planning
Range
Deployment
Assortment
Planning
Range
Development

3. Store Sales
Plan
Retail Space
Plans
Clustering
and Grading
Category Plot
Allocation
Strategy
Category
Architecture
Pricing
Architecture
Seasonal Assortment
Plan
Category Sales and
Markdowns
Inventory Plan Open to buy
Pre Season OTB by
week
Article Orders
Size Curve Analysis
SKU Level Orders
Size Pack Definition
Size Curve
Architecture
Assortment
Architecture
Retail Planning
Assortment Planning
Merchandise Planning
Range Development
Range Deployment
Planning Framework

4. Purpose : Forecast Net Sales by stores by Month. The Output is in sync with IBP plan
being submitted and aligned with Finance and operations. Forms the basis of all
Planning
Input
• Sales History
• Sales Forecast
• Annual Store
plan
• Anual Renovation
Schedule
• New store
opening schedule
Step n° Description
1 Plan Net sales on store level
2 Determine Comp Status for each full year
3
Plan Comp Stores based on the history. Non-Comp Stores are
planned based on a selected reference store group
4
Brand/Category mix split at store based on available reference
data
5 Reflect openings, closings and remodeling of stores
6 Align with Merchandise Plan
7 Manage Exceptions
Output
1. Net sales
• Format
• LFL
• Country
• Key
• Category
2. RFC
3. IBP Sheets
4. Store Plan By
Week
5. Input for WSSI
Retail Sales Planning Retail Space Planning Retail Grading

5. Purpose :Create a credible space plan for the store, based on the principles of Efficiency,
Profitability and Brand Direction.
Input
• Store Sizes
• Store Capacities
• Historical SPF
• Inputs from VM
and Retail OPS
Step n° Description
1 Review Sales Plans and SPF
2 Review Category SPF based on LF
3 Review Store Restrictions that need to be considered
4 Challenge existing protocol
5 Determine Ideal Space Allocation
6 Review with VM and Operations
7 Allocate Space by Category and Shape New Stores
Output
1. Cost of Fill by
store
2. Store wise
category wise
option capacity
3. Store wise
category wise
Terminal Stock
Plan
Retail Sales Planning Retail Space Planning Retail Grading

6. Purpose : Create Identifiable clusters according to the commonalities that stores exhibit
Input
• Sales history
• Options history
• Actual capacity
• Current Plan
values
Step n° Description
1 Create retail grades for new stores and review existing
2 Grade stores on 5 point Scale (NS,ASP,ATV,Velocity,FPS)
3 Cluster stores by Price sensitivity (Premium, Prime, Core)
4 Cluster stores by Size (S, M, L)
5 Create Category Clusters for Key Categories
6 Create Size to Category Matrix
Output
1. Store grading by
commerciality,
sales and space
2. Forms the Basis
of Assortment
Architecture
3. Grading Matrix is
complete with
number of
options required
at each grade
Retail Sales Planning Retail Space Planning Retail Grading

7. Category Sales Planning Merchandising Plans Inventory Plans WSSI/OTB
Purpose : Forecast the category sales by store clusters and regions to form the basis for
OTB and in-season product management. This should be the basis for IBP inputs.
Input
Retail planning to be
complete
• Sales History
• Sales Plans
• Grading
Category direction
from:
Principles/Brand
Manager/GM
Output
Category sales plan
by stores aggregated
to retail grades and
clusters by region.
Retail Sales Plans
and Category sales
plans are alligned
Step n° Description
1
Cluster stores and product based on net sales, space and
Store profile
2 Complete category plot
3
Develop category sales forecast based on brand directions for
the season. Indicate highs and lows by category.
4
Segment the Strategy by region and store grade (include New
Stores)
5 Create category growth percentage by grade
6 Alignment Meeting to communicate the category sales plans

8. Category Sales Planning Merchandising Plans Inventory Plans WSSI/OTB
Purpose : Develop and Monitor core KPI for the stores and categories. This is a RFC at
RMH level. Forms the Basis of Inventory plans and in season control.
Input
Retail planning to be
complete
• Sales History
• Sales Plans
• Grading
Category direction
from BU’s
Category Sales Plans
Output
Category sales
planning complete
with forecasts by
week on all major
Merchandising KPIs
Step n° Description
1 Plot the trade and marketing calendar for the season.
2
Plan, FPS, MD , Margins, ASP at store cluster level for each
market
3
Determine season splits (SPS,SCS,SNS) to develop a phasing
by season
4
Develop weekly sales plans for the clusters. Reflect on the Pdt
launch and activations to map highs and lows
5
Apply category split s developed from cat planning and apply
to weekly sales
6 Align with store plan and category plans.

9. Category Sales Planning Merchandising Plans Inventory Plans WSSI/OTB
Purpose : Develop a pre season inventory map for the brand to form the basis for OTB and
in-season category management. This is a monthly rolling plan.
Input
Category sales plans
Merchandising KPIS
Space plans
Phasing Details
Historical Inventory
details
FO sales plans
Output
Category sales
inventory
projections at Qty
and Value.
Weekly and Monthly
covers
GMROI budgets by
category
Step n° Description
1 Define Core Inventory KPI
2 Determine FO sales plans for the season +1
3
Create a Region/Cluster based inventory requirements for the
season
4 Reflect on existing inventory on hand and terminal stock requirement
5 Review category sales plans based on inventory projections
6
Finalize and publish inventory plans for the season extending to
EOY

10. Category Sales Planning Merchandising Plans Inventory Plans WSSI/OTB
Purpose : Develop a pre season OTB, or a buying budget to forecast net inventory
investments for the planning season to achieve the financial budget for the brand
Input
Signed off Retail
sales Plans
Signed off Category
sales Plans
Signed off Inventory
plans
Output
OTB:
Seasonal buying
budget and intake
plan. { Sales, MD,
Margins, Buy Units, Buy
Value at cost, @ region
and Cluster level}
WSSI :
Weekly/Monthly
sales and Inventory
projections based on
Planned purchases
and receipts
Step n° Description
1 Reflect on the Store Plans
2 Reflect on Monthly Inventory Covers and Avg. Seasonal Covers
3 Reflect on special product requirements (Promotional, Uniforms…)
4 Review Pricing and Markdown Architecture
5 Review Currency Adjustments if any
6 Finalize and publish seasonal OTB plans for the brand