How is stock counted when a baby or kids clothing store sells?

The stock in a baby or kids’ clothing store is sorted by size and by season, and some of it belongs to other people. That makes the closing count more than a head count of garments. It sets out what you are taking over and what you are not. Here is how the process usually goes and what to agree on beforehand.

Who counts, and when

Buyer and seller normally count together, as close to the closing date as is practical, often after hours or on a closed day. Some parties hire an independent counting firm. Agree on the date, the method and who attends, and keep both sets of count sheets. Your accountant can advise on how the count ties to the books.

Current, past-season and outgrown sizes

Count current-season stock, past-season stock and slow-moving sizes in separate groups. A coat for a season that has passed behaves differently from a first-size outfit that sells all year. Keeping the groups apart lets the agreement treat each one on its own terms, whatever method the parties choose.

Goods that are not the seller’s

Set aside consigned goods, items on layaway and items held for gift registries. Confirm with your lawyer and the agreements whether they belong to other people or are promised to customers. The agreement should say how each is handled, including who deals with the consignors and the customers after closing.

How the agreement records the count

• The date, the counting method and the people who attended.
• The groups counted and the items set aside.
• How a difference between the count and the seller’s records is settled.
• Who is responsible for goods on order but not yet received.

Compare with how a pet store’s stock is counted, which raises similar questions.