How to launch a collection: Sales forecasting

In the last post we gave you a full overview of how to financially plan a collection launch, but you may be wondering, how and where do I start? The first step of financial planning is sales forecasting. It serves as a guide for all your future expenses.

Here’s a straightforward explanation to creating a reliable sales forecast, even if financial jargon isn’t your first language!

1. Start with the Company’s Historical Sales Data:

To analyze and make accurate predictions, your sales data will be your foundation, which you can reuse by creating a copy of last year’s sales data and editing it accordingly to your present situation. This means using this information as a base while excluding irregularities, such as special projects, that deviate from the typical financial patterns of the business.

Dive into the refined data to identify patterns and trends: Look for seasonal spikes, steady growth rates, or declines. For instance, if you’ve noticed a 10% sales increase every summer, factor this growth into your future summer sales predictions!

2. Incorporate Economic & Industry Trends:

Overlay your curated historical data with current economic indicators and fashion industry trends. Are consumers’ spending habits shifting? Is there an emerging trend that could impact demand? Adjust your forecast by a certain percentage to account for these changes.

A tip from us: use the latest financial statements of publicly owned companies in the fashion industry and analyze how their sales perform compared to last year.

3. Consider Operational Context:

Every fashion retail operation is unique. Reflect and adjust your forecast considering:

(a) Supply chain capabilities: maybe this year you’re able to produce faster, making sure popular designs get restocked quickly. Or maybe you found a way to produce for cheaper, allowing you to offer garments for a more competitive price. These would improve sales!

(b) Marketing initiatives: imagine you just kickstarted activity in a new social media, or your website traffic is higher than ever. This would certainly impact performance!

(c) Store expansions or closures: more channels and locations equals more traffic. If you've done a diligent research you should have a good feeling on the extra sales an extra store should bring about. Factor it in!

By considering these three aspects you can develop a sales forecast that adapts to both your story as well the business environment. This approach ensures that you’re navigating with a clear and informed vision of the future.

We hope this sets you on the path to a successful and stylish future!

In our next post we will dive into Production Budgets, follow us to make sure you don’t miss out!

If there’s anything additional you’d like to know - send us a message and we’ll be happy to answer 💙