Every year, many retailers find themselves in enough distress that restructuring advisors are
brought in to try to salvage the business.
With all of the distressed retailers that
have come and gone, can anything be
learned regarding mistakes to avoid
or successful strategies to emulate?
Clearly, many retail failures are caused
by macroeconomic factors, heavy
debt loads, or a changing competitive
landscape. However, many other
failures are related to performance
or operational issues that recur in
distressed retail businesses. This
article addresses some of these
performance and operational issues.
Two recurring themes that emerge from
the experiences of companies that have
successfully addressed these problems
to turn around their businesses are:
• Speed Is a Priority. Making
decisions quickly and taking
action immediately significantly
enhance the chances of success.
By overanalyzing and delaying
decisions, companies have actually
made decisions—likely bad ones.
• Product Is a Priority. Retail is all
about the product offering, and every
decision should be weighed against
its impact on the core customer and
the products she wants to buy.
Early Stage Resistance to Change
The decline of a retail business can be
fast, but more often than not, the decline
is slow and painful. Unfortunately, in this
Preventing Retail History
from Repeating Itself
BY STEVE MOORE, PRINCIPAL, TORTOLA ADVISORS