Retailer Barneys and Designer brand Prada Disagree

A Wall Street Journal article (5 February 2011) describes a proposal by Prada to lease space from the Barney’s retail store and manage its inventory and pricing.  This proposal was rejected by the retailer, that prefers to attract customers to its store to find exclusive offerings.  The retailer claims to have reallocated the space to another designer.  This “tussle” (as claimed by the article) brings up the question – Is manufacturer managed retail inventory a bad idea for the retailer ? If a retailer permitted a manufacturer to manage retail inventory for a brand, what coordinating constraints should be added to manage the chain’s customer experience ?

About aviyer2010

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