ASK THE EXPERT: HOW CAN I MINIMIZE THE EFFECTS OF THE ECONOMIC SLOWDOWN?
Q: I know the market overall is slowing down, but I’m wondering what strategies you can give me to minimize the effects of the slowdown. I’m seeing my business drop by about 5% to 10%. Is this normal for better menswear stores?
A: We are seeing a broad slowdown, so your case is not unusual. That said, there are some geographical areas that are doing better than others.
A few months ago, destination stores were exceeding everyone’s numbers, but demand has shifted to more local, suburban locations. Cities are not consistent – some are doing well, while others are not.
One important strategy no matter where you’re located is to take your normal levels of pre-pandemic markdowns.
One of the biggest concerns that we have is that some merchants got so used to strong business after nearly two years of gains that they are hesitating when it comes to taking their normal first and second-level markdowns. Thus, inventory is building while we are in a slowing cycle, which is not a good place to be.
It’s time to reach into your retailers’ toolkit and take out those 15% or 20% to 30% markdowns to clear items so you have enough open-to-buy to bring in new and exciting merchandise. Demand has downshifted, but it is still out there.
It’s time to get back to the strategies that put us in a strong position for the next up cycle, which includes right-sizing your inventory.
Photo by Andrea Piacquadio.
Thank you for the advise.