Eureka! Deloitte say struggling retailers should close stores

10 September 2012

Derelict_shop_-_Newtoft_-_geograph.org.uk_-_779821 So there’s this global economic crisis and retailers are collapsing all over the place, with a 15% increase in the number of them that went into administration in the first three months of the year (69, up from 60 in the same period in 2011).

How’s it all happening? What can be done about it? It’s a tough one, but business analysts Deloitte have conjured up a genius solution – retailers need to close some of their shops. Wow! Who’d have thunk it, eh?

They say that online sales are the equivalent of more than 60 million square feet of retail space and as that figure grows, retailers bricks and mortar stores will become more and more pointless. It’s proper ‘out of the box thinking’ and no mistake.

Hugo Clark, author of the report, says: "The death of the high street is far from being a reality, yet stores are now just one part of a larger, more connected customer experience. Shops now represent a potentially clumsy, fixed point in an increasingly mobile world. In many cases, they are slow and costly to adapt, expensive to operate and difficult to relinquish once surplus to requirements."

He added: "Reducing portfolios is not easy. Inflexible lease structures in particular mean that a decision to downsize store portfolios can take a considerable length of time to implement cost-effectively. The mistake that many retailers make is waiting until the eleventh hour, when cash to support lease surrenders is not available.

"Well funded businesses should consider investing spare cash into negotiating surrenders of their poorest performing stores. While this is unlikely to be cheap, it may prove to be a good long term investment."

Thankfully it seems that retail analysts aren't suffering all that much during this tough times. Next week – Deloitte explain how we can stop the bathroom from getting flooded all the time simply by turning the taps off....

[Guardian]

TOPICS:   High Street News

5 comments

  • Paul S.
    Let the downward spiral of the high street commence.
  • Nicodemus J.
    Well, it may sound obvious on the face of it but the comment about waiting until the last minute to close stores is a good one - look at how many businesses don't do that and then end up in administration. The administrators sell off the profitable stores and close the unprofitable ones. If the business had planned properly they could have done the same thing without losing the stores to other people. I think that is the key point of the report, rather than to state the obvious in simplistic terms.
  • Late
    In related news, retailers who are doing really well might want to consider opening new stores...
  • Dick
    Buy high, sell low. No. Sell low, buy high.
  • br04dyz
    Could you imagine how awesome the high street would be if Argos pricematched Amazon? If clothing stores charged webprices and if the coffee shops would just FK OFF?

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