Q: I’m reading a lot about how department stores—that were already in trouble—may not recover from this economic crisis. Where will this leave specialty stores?
Steve Pruitt: First, let’s hope that the department stores make it. There are a lot of great retailers that work in those stores. But in the face of this crisis, it is true that the big boxes are facing a real threat, and independent merchants who manage their companies well could be the big winners.
Let’s start with realigning the selling seasons. We actually have an opportunity to align the seasonal merchandise with consumers’ lifestyles. (Historically, it has been too early.) Making this big shift now only makes sense because we are in dire need for higher margins.
Next, I would suggest you take more control flowing receipts (another big cash flow win). Instead of having a seasonal receipt flow, we need a monthly receipt flow. This concept is going to require our retailer/vendor partnerships to be deeper and extremely flexible. For those who get their arms around monthly receipt planning, cash flow will even out. There will be less need for markdowns, because inventory isn’t aging as much. Improved aging is another important factor in sales increases.
So, where does this all leave the specialty store? In better control.
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