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

Teaching Note for HBS Case Nos. 224-023 and 224-024. As 2017 was drawing to a close, birddogs’ founder and CEO, Peter Baldwin, was working with his CFO Jack Sullivan to prepare for 2018. A nascent direct-to-consumer apparel brand, birddogs had carved its niche in men’s athletic shorts. The firm was coming off 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. Earlier that year, birddogs’ growth had surpassed expectations and caught its inventory management system off-guard, resulting in stockouts for about one-third of its products.
To determine the appropriate investments in working capital for 2018, Baldwin and Sullivan first needed to forecast demand for their product, determine how much inventory was needed to meet this demand, and strategize how to finance this inventory. Historically, Baldwin and Sullivan had adhered to a lean working capital management strategy to ensure that the company didn’t overextend itself. But, given the recent stockout issues, they were reevaluating their previous lean inventory management approach. Encouraged by the prospect of increased visibility from upcoming publicity, Baldwin and Sullivan began to entertain the idea of a bolder, more aggressive strategy. The future was bright, and they were prepared to seize it.