Discovering Ways Out of Seasonal Inventory Challenges
The Challenge
At its height, the Discovery Channel retail store division had established approximately 100 outlets in mall, airport and other prime retail locations. But there was a challenge: In the words of the company’s SVP and CFO, “It looked like a toy store profile – flat for nine months, then sales shot through the roof. So we would either buy for three seasons or buy for the holidays.” As a result, the company had to deal with excess inventory that was not sold in either phase.
How Icon Uncovered Value
ICON and Discovery developed a strategic partnership: Discovery exchanged excess seasonal inventory for advertising space. ICON quietly sold the excess seasonal inventory elsewhere, and Discovery was able to turn $5 million of slow-moving products into advertising dollars.
ICON has structured over thirty transactions
for Discovery Communications, ranging from issuing Trade Credit for inventory to funding agency fees.
The Results
ICON took inventory that Discovery’s stores no longer wanted and provided efficiencies in advertising expenses. Discovery was able to mirror its own sophisticated advertising strategy and tactics through ICON’s media-buying expertise. Today, Discovery has transitioned its brick-and-mortar retail business into a thriving online retail business, and has continued its partnership with ICON.
