Q: The markets dropped over 4 percent on Thursday due to Coronavirus fears. The air seems to be coming out of this balloon fast. How long before I should start taking action? And what are the first steps?
Steve Pruitt: This is a balancing act. You don’t want to over or under-react. As of now (today) we are hearing no dire reports, but it is still early.
Here is a short list to check off:
1. I presented a process in MR a few days ago to Acid Stress yourself—do it now, if you haven’t already.
2. Review your Spring On-Order and look at completion dates. Don’t let anything slide. You may ask “if I take goods at a discount is that okay?” That’s a good question. It depends on 1) your cash projections and 2) your projected OTB position.
3. Be sure you have plenty of OTB for stock fill-ins.
4. Do not allow yourself to be overbought by a dime.
5. Talk with your sales planner. Your sales projection must be elastic; no seasonal fixed plans.
6. Talk with all your major vendors. Discuss the supply chains, and stress that we are all in this together. Have a clear understanding of your partnership. Ask the question: “If our trend were to weaken, causing my inventory to back up, and my future OTB to go negative, how should ‘we’ address the situation?” Check back in a few days as the situation plays its way out. Please leave comments with options that our family of stores could find useful.
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