What should I ask about a sporting goods store’s out-of-season inventory?

Sporting goods run in cycles, so every store holds stock for a season that is not here. Ask for an inventory list sorted by sport and by date received. Look for gear carried over for more than one cycle, items with sizes nobody wants, and models that have been replaced by newer ones. Old stock can look healthy in the books and be difficult to sell.

Ask how stock is bought. Are orders placed far ahead with suppliers who expect commitments? Can unsold goods be returned or exchanged? Are there early-order discounts that encourage overbuying? Find out how the seller decided on quantities, and how often those decisions were wrong.

Then ask about storage and cost. Is the stock kept in a clean, dry place? Does the landlord allow it? Is anything on consignment, on credit or used as security for a loan? Your lawyer can check for liens, and your accountant can show how the stock is recorded. Finally, ask how the seller clears leftovers: end-of-season sales, clearance racks, bundles or donations. A store that plans clearance well usually carries less dead stock than one that hopes goods will sell next year.

Key takeaways

• Sort the stock list by sport and age, and watch for carried-over gear.
• Ask whether unsold goods can be returned and what commitments exist.
• Check for liens, consignment or unpaid supplier balances on the stock.