The retail sector continues to make headlines, with news of store closures and liquidations dominating the media. Factors contributing to this turmoil include:
It is important to remember that despite the need to rationalize both retail square footage and individual retailer’s store footprints due to the growth of the e-commerce channel, the majority of retail sales will continue to be done in stores. Yet retailers need to transform their businesses with a sense of urgency to be competitive. Continuing to run their businesses the way they do now “but better” is a recipe for a Chapter 7 liquidation.
The articles in this issue discuss the current retail landscape and focus on new approaches to improve retail performance.
Dan Lowenthal of Patterson Belknap Webb & Tyler LLP reviews the troubled state of brick-and-mortar retail, how different retail categories have fared, and some root causes of the current crisis. He discusses why the current U.S. Bankruptcy Code has made it more challenging to reorganize and how to avoid bankruptcy.
In assessing the challenges traditional retailers face, Harold Bordwin and Doug Greenspan of Keen-Summit Capital Partners LLC discuss the need to reimagine store portfolios and restructure before survival is in jeopardy. Retailers may have a once-in-a-lifetime opportunity not to “let a good crisis go to waste” by proactively engaging with landlords.
Frank Morton and Nick Taylor of Gordon Brothers provide an international perspective on the challenges of broadening a retailer’s geographic footprint and replicating success in multiple markets. They discuss strategic and operational shortfalls, industrywide secular change, and changes in consumer habits that have led to country exits.
David Peress of Hilco Streambank shares his perspective on protecting and leveraging the value of a brand in a restructuring. He discusses how protecting brand value leaves multiple distribution channels for the brand. Recent examples of how a retail brand can be preserved and restructured illustrate this hypothesis.
Portfolio rationalization is only one piece of the puzzle for retailers to remain competitive. There are many more tools available to retailers seeking to improve their performance and stay in the game for the long haul.
Retailers need to reinvent themselves to win in today’s marketplace, says Joe Jackman of Jackman Reinvents. He describes a road map for success that begins with retailers insightfully defining the category they are in as a means to remain relevant over the long haul, helping to set their brand apart and opening new avenues of growth.
José Chan of Celect Inc. explains why predictive analytics matters in retail. His thesis is that despite the abundance of data in retail, traditional analytical methods do not make the most productive use of it in a manner that retailers can execute against.
Jo Seed of LogicSource discusses new options available to retailers for sourcing, procurement, and supplier management. Retailers traditionally have invested personnel resources in product creation and sourcing but paid little attention to expense efficiencies below the gross margin line. Seed describes in a case history how partnering with specialist providers on store remodels can save capex dollars and improve “speed to open.”