A recent article in the Wall Street Journal tackled the grim issue of retail chain bankruptcies head on.
Citing a number of chains already in bankruptcy, the article also pointed out a number of issues retailers everywhere are facing and the warning signs other retailers may be in trouble.
The prognosis isn’t good:
- A Projected 148,000 storefronts will close this year according to the International Council of Shopping Centers
- “Potentially, 10% of all retailers could face significant restructuring, bankruptcy or liquidation” according to Colin McGranahan, a retail analyst at Sanford C. Bernstein & Co. in the article.
THE REAL WORLD RETAILING TAKEAWAY
Learn the warning signs.
Cash Flow – are you spending more than you’re taking in? Time to rein in expenses at every possible turn.
Inventory – have your weeks of supply increased or inventory turns decreased? Time to stop ordering and even trying to return excess merchandise to vendors.
Payroll – is your payroll percentage to sales increasing? Time to cut staff.
Traffic/Transaction counts — are they decreasing? Time to bust out some marketing to drive sales.
We have a little more than a week to go before the big day. Make every day count.