How do I wind down my sporting goods store’s end-of-season clearance before selling?

Clearance is normal in sporting goods, since seasons change and stock ages. The trouble comes when it overlaps with a sale process. Heavy discounting can lift revenue and lower margins for a while, and a buyer reading the statements may misread what is typical. Decide early what you will clear and what you will keep.

Keep records that tell the story. Note the dates, the items, the discounts and the reason for each markdown. This lets your accountant separate ordinary trading from clearance when preparing figures for buyers. Be honest about any stock that remains, whether it is current, aged or out of fashion, since buyers will count it.

Think about what the buyer wants to find. Shelves stripped to the walls look like a business in decline, while a well-stocked shop for the coming season looks ready to trade. Talk with your lawyer and your buyer about how inventory is handled at closing. Avoid buying large amounts of new stock late in the process unless you have agreed how it will be treated. If you can, schedule the clearance well ahead of any buyer visits, so the shelves have time to be restocked sensibly.

Key takeaways

• Decide what to clear and what to keep before you start discounting.
• Keep dated records of every markdown and the reason for it.
• Agree with the buyer how remaining stock is counted at closing.