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What markdowns do to a fast fashion collection

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

An illustrative fashion retailer in Europe buys 10,000 jackets at EUR 10 each and prices them at EUR 40. It sells 60 percent at full price, 30 percent at half price, and the last 10 percent is donated or recycled (EU rules now ban large companies from destroying unsold clothes). What are revenue and gross margin, compared with selling everything at full price?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Gross margin = (revenue minus cost of all units bought) / revenue
- Revenue = full-price units x 40 + markdown units x 20
- Cost = 10,000 x EUR 10, including unsold units

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Revenue
What a strong candidate does: 6,000 at EUR 40 plus 3,000 at EUR 20.
Revenue (EUR): 6,000 × 40 + 3,000 × 20 = 300,000
Step 2: Gross margin
What a strong candidate does: Revenue minus EUR 100,000 of cost, as a share of revenue.
Gross margin (percent): (300,000 - 10,000 × 10) ÷ 300,000 × 100 = 66.67
Step 3: All at full price
What a strong candidate does: 10,000 at EUR 40.
Gross margin at full price (percent): (10,000 × 40 - 10,000 × 10) ÷ (10,000 × 40) × 100 = 75

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The retailer should buy less upfront and reorder winners during the season, because markdowns and unsold stock cut revenue from a possible EUR 400,000 to EUR 300,000 and gross margin from 75 percent to about 66.7 percent. First, 30 percent of jackets sell at half price and 10 percent earn nothing. Second, unsold clothes cannot be destroyed under EU rules, so overbuying has no cheap exit. The risk is running out of popular items, since reorders need a fast supply chain. As a next step, test smaller first orders on a few lines and track full-price sell-through.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.