As I pen my guest editor column for this edition of the Journal of Corporate Renewal focused on retail, it is the first week of 2023, and retail is once again challenged. Inflation is high, consumer confidence is down, and inventory levels remain challenged. A number of large retailers appear to be close to filing Chapter 11, including Bed Bath & Beyond, Party City, and others. We’re seeing continued challenges with home goods and beauty. Customers are increasingly bifurcating their spend between discount and luxury, with the middle tier being hit the hardest.
We have a tremendous lineup of authors to offer their perspectives on what they are seeing in the retail marketplace.
We start with the team at Paul Hastings, who focus on how to avoid a retail liquidation. In my experience, without careful planning and diligent execution, distressed retailers can find themselves in liquidation mode overnight. A road map for avoiding that fate offered by Frank Merola, Gabe Sasson, and Samantha Martin includes rightsizing the store fleet, understanding the cost of the process, and clearly communicating to stakeholders why restructuring is better for them than a liquidation.
Members of Ankura’s new retail performance improvement group, led by Keith Jelinek, focus their article on the customer, including how to acquire and retain customers in this rapidly evolving retail landscape. Keith, Laura Wheeler, and Frank Jones explain how physical stores have reemerged as strategic assets and the interplay between ecommerce, stores, and technology.
M3 Partner’s Colin Adams, Matt Manning, and Ken Ehrler look at recent retail cycles for clues on what lies ahead for retailers. They examine 2008 and the disruptions caused by COVID and look at winners, losers, and categories. It’s a tremendous read for those thinking about what’s to come in our current cycle.
Next, it’s over to the UK for a look at the need for what Interpath’s Suren Thadani and Stuart Reid call “the big reset” and the need to simplify end-to-end retail in response to inflation. Their viewpoint is that retailers generally need to simplify their approach. They suggest better demand forecasting, inventory management, fulfillment, and operational execution are key for retailers to survive.
Lastly, Andrew Mordkoff and Erin Ryan of Willkie Farr revisit issues around providing post-petition interest for unimpaired creditors, a topic Andrew and another of his colleagues first addressed in the pages of the JCR in March 2020. It’s an important issue in large cases, and one with developing case law. The article is an important read and offers perspective for investors and practitioners.
Having completed my final year as chair of TMA’s Editorial Advisory Board for the JCR, I would like to thank the committee and our in-house editor Eddy McNeil, who helped publish 10 excellent issues of the JCR every year. It’s a tremendous journal, and I’m proud to have been part of it for so many years.