22 Appendix D — Dead Stock Analysis
22.1 D.1 Whole-Business Dead Stock
Products that have been in the catalog long enough to generate orders but received none in the trailing 12 months represent capital tied up with no recovery path. In a wholesale gift business, dormant inventory is not merely a missed sales opportunity — it occupies warehouse space that could hold faster-moving products, ties up working capital, and in many cases carries insurance and storage costs that erode margin.
Across all segments, 35 products fit this description. Their combined historical revenue totals just £1.94K, and they are now completely dormant — zero orders from any segment in the trailing twelve months. The £1.94K figure is the lifetime contribution of products that have since become commercially inert, not an estimate of current value. For inventory valuation purposes, these SKUs should be written down to salvage value or zero. A buyer should request the seller’s definitive inventory schedule, identify carrying costs associated with these SKUs, and apply a significant markdown before incorporating any dead-stock inventory into the asset valuation. Where supplier return agreements exist, those should be exercised before close; where they do not, clearance pricing or charitable donation may recover marginal value and free physical capacity for the Q4 build.
22.2 D.2 UK Dead Stock
The majority of dormant inventory is domestic: 34 UK products with combined historical revenue of £1.80K. This concentration in the UK catalog is consistent with a larger UK product range — more SKUs in the catalog means more opportunities for demand to lapse on marginal items. For a buyer, the UK dead-stock list is the natural starting point for catalog rationalization. Each of these 34 products should be checked against supplier contracts (to confirm whether return or exchange is possible), warehouse location records (to quantify the storage cost being incurred), and the product affinity analysis in Appendix C (to confirm that none of these SKUs serves as a cross-sell anchor for an active product). Products that fail all three checks should be marked down for clearance before the first Q4 under new ownership, freeing physical and commercial capacity for the SKUs that customers are actually ordering.
22.3 D.3 International Dead Stock
International dead stock totals £901 in historical revenue across 20 products that received zero orders in the trailing 12 months. At segment scale this is commercially immaterial — less than 0.1% of international gross revenue — and does not warrant a dedicated remediation program. The products are included in the whole-business dead stock table in Section 22.1 and flagged for clearance in the pre-close data-quality checklist. The low international dead-stock count is partly a function of the narrower international catalog: with fewer SKUs active internationally than domestically, there are fewer opportunities for demand to lapse entirely. Nevertheless, each of these 20 products should be verified against current inventory positions. If physical stock remains in the warehouse, the same clearance logic applies as for UK dead stock: recover what value is available, free the space, and remove the products from the active international catalog.
Author: Shawn Phillips | Lailara LLC