ASK THE EXPERT: WHAT’S A GOOD STRATEGY FOR NEXT YEAR’S SLOWDOWN?

Q: As a menswear retailer I saw one of my best years ever this year, but I know we must be headed for a slowdown. All my best customers have already filled their closets with new pieces. What should my strategy be as I face slower sales next year?

A: This year has been great for our industry. All indications are that 2023 will be a softer year. At this point it’s just a question of how soft and for how long. Our portfolio of stores went flat in October and registered small decreases on average in the month of November. That being said, some stores still had increases.

Where you do business will be one of the determining issues for this next year. If you’re in a destination customers travel to, your business could continue to see increases. If you have a suburban store you should probably plan more conservatively.

You’re also correct about customers having filled their closets, particularly with suits and the pieces that accessorize the suit. The fashion business always runs in cycles. It’s important to understand where you are in the fashion cycle: the deeper you get into the cycle, the more important fresh merchandise is to sustain sales. At the same time, we are facing price increases due to inflation. This combination of slowing sales and rising prices puts a lot of pressure on assortment plans.

So, here’s what to do:

1. Be sure to clear your seasonal inventory. You don’t want to deal with seasonal carryover. This will tie up money you will need to fund new assortments.
2. Be hyper-critical on inventory performance. You will need to introduce new looks (vendors) faster than ever.
3. Re-evaluate your marketing plans. The pent-up demand has been filled. You’re going to need to create your demand.

These are just a few ideas.

Evaluate every sector of your business to determine how you can improve performance. We are reaching the end of a retail cycle. As a merchant, you need to be prepared for the next cycle of growth. This new cycle will likely start sometime in the next 12 to 18 months. The winners in the new cycle will be the ones who create a new strategy and execute it well.

Happy Holidays, and have a great New Year!

Photo by Jess Bailey Designs