ASK THE EXPERT: HOW CAN RETAILERS STAY AFLOAT AMID SO MUCH CHANGE?

Q: It looks like there may be a lot of business and regulatory changes coming this year. I know that you offer financial planning advice, as well as inventory planning.

Which retail best practices do you recommend to keep my business financially stable in the face of all of these uncertainties?

A: There are two thoughts that pop into my mind as I consider your question.

First, maintain liquidity. There is probably nothing more important than positive cash flow coming into your business. You should be setting money aside at least seasonally, if not monthly. Growing cash reserves are the bedrock of stability, and for family businesses (like many of our stores) it assures that the business has longevity. If your business is not generating excess cash, you must fix this. Set up a meeting with your accountant and come up with a plan. If your accountant doesn’t have an answer, contact me directly.

Second, you must introduce more newness into the inventory mix. In most cases this means dropping slow-moving vendors and bringing in new vendors. Newness is the fountain of youth for a fashion store. The competition is fierce, and the only way to stay ahead of the game is to find the new shiny objects.

Finally, remember that retailers always face uncertainty — this is not new. So we have the tools to adapt and continue to do great business.

Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Email: steve@blksretail.com.