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• Background Note | HBS Case Collection | 2013 (Revised from original 2012 version)

  Inventory-Based Lending Industry Note

  C. Fritz Foley, Ananth Raman and Nathan C. Craig

  Keywords: Banks and Banking; Financing and Loans; Banking Industry;

  Citation:

  Foley, C. Fritz, Ananth Raman, and Nathan C. Craig. "Inventory-Based Lending Industry Note." Harvard Business School Background Note 612-057, May 2013. (Revised from original January 2012 version.)

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• Working Paper | HBS Working Paper Series | 2013

  Improving Store Liquidation

  Nathan Craig and Ananth Raman

  Store liquidation is the time-constrained divestment of retail outlets through an in-store sale of inventory. The retail industry depends extensively on store liquidation, not only as a means for investors to recover capital from failed ventures, but also to allow managers of going concerns to divest stores in efforts to enhance performance and to change strategy. Recent examples of entire chains being liquidated include Borders Group in 2012, Circuit City in 2009, and Linens 'n Things in 2008; the value of inventory sold during these liquidations alone is $3B. The store liquidation problem is related to but also differs substantially from the markdown optimization problem that has been studied extensively in the literature. This paper introduces the store liquidation problem to the literature and presents a technique for optimizing key decision variables, such as markdown, inventory, and store closing decisions during liquidations. We show that our approach could improve net recovery on cost (i.e., the profit obtained during liquidations stated as a percentage of the cost value of liquidated assets) by 2 to 7 percentage points in the cases we examined. The paper also identifies ways in which current practice in store liquidation differs from the optimal decisions identified in the paper and traces the consequences of these differences.

  Citation:

  Craig, Nathan, and Ananth Raman. "Improving Store Liquidation." Harvard Business School Working Paper, No. 13–096, May 2013.

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• Case | HBS Case Collection | 2013

  Dignity Health: A Portfolio of Improvement Projects

  Anita L. Tucker and Lydia Ypsse Kim

  Citation:

  Tucker, Anita L., and Lydia Ypsse Kim. "Dignity Health: A Portfolio of Improvement Projects." Harvard Business School Case 613-092, April 2013.

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