Maintained Markup (MMU)
Maintained Markup (MMU) is the actual gross margin realized on sold merchandise after markdowns, employee discounts, and shrinkage are applied — representing the true margin outcome of a season compared to the Initial Markup target.
Maintained Markup (MMU) is the gross margin actually realized on merchandise after all deductions from the original retail price — markdowns, employee discounts, and shrinkage — have been accounted for. It represents the true margin outcome of a season, as opposed to the theoretical margin set at the time of purchase.
MMU% = (Net Sales − Cost of Goods Sold) ÷ Net Sales × 100
Where Net Sales reflects actual selling prices, including the effect of all markdowns taken during the season.
MMU vs Initial Markup
Initial Markup (IMU) is the planned margin at the original retail price. Maintained Markup is the realized margin after everything that reduced the selling price from the original:
MMU ≈ IMU − Markdown Rate − Shrinkage Rate
A brand that plans IMU at 62% and takes markdowns equivalent to 12% of sales, with 1% shrinkage, will realize an MMU of approximately 49% — a significant gap from the planned target.
The MMU gap is the most direct financial measure of planning accuracy. Brands that regularly achieve maintained markup close to their IMU target have accurate buy depth, effective allocation, and controlled markdown rates. Brands with large IMU-to-MMU gaps are overbuying, over-allocating to the wrong doors, or both.
MMU as a planning feedback signal
MMU by category, by season, and over time is one of the most useful signals for calibrating forward-looking plans:
- Categories with low MMU relative to IMU have a structural markdown problem — too much depth, wrong size curves, or poor allocation
- Styles with individual MMU far below category average are candidates for SKU rationalization
- Season-over-season MMU trends reveal whether planning accuracy is improving or deteriorating
MMU and the Merchandise Financial Plan
The MFP is built with an MMU target — typically expressed as a gross margin % target. Planned markdown rates and shrinkage assumptions are inputs that determine the planned MMU given a specific IMU.
When actual markdown rates exceed the planned rate, actual MMU falls below the MFP target. This is the most common cause of realized gross margin falling short of plan — and it originates in buy depth decisions, not pricing decisions.
If your MMU is consistently 8–10 points below your IMU, the gap is almost never a pricing problem. It's a depth problem — styles are being bought deeper than what the full-price sell window can absorb, generating the markdowns that compress maintained markup.
RetailNorthstar connects buy depth decisions to OTB margin targets so that the planned markdown exposure of each buy is visible before the orders are locked.