Accelerating with Caution: Forecasting and Managing birddogs’ Growth (B)

As 2017 was drawing to a close, birddogs’ founder and CEO, Peter Baldwin, was working with his CFO Jack Sullivan to prepare for 2018. Their task at hand? To predict the demand for their product in the coming season, determine the appropriate investments in working capital, and explore financing options. birddogs was a nascent direct-to-consumer apparel brand that had carved its niche in men's athletic shorts. The firm was coming of a stellar year, having more than doubled its sales over the previous year. This swift expansion, however, wasn't without its fair share of challenges—primarily in managing working capital, with inventory being the chief concern. The speed of birddogs' growth caught its inventory management off-guard, resulting in out-of-stock situations for about one-third of its products during 2017. Historically, the company had followed a conservative approach to inventory investment, which often led to stockouts. Baldwin, had always favored this prudent approach to ensure the company did not overextend itself. Yet, times were changing. Encouraged by the prospect of increased visibility from upcoming publicity, Baldwin and Sullivan began to entertain the idea of a bolder, more aggressive investment strategy. The future was bright, and they were prepared to seize it.