Eureka! Deloitte say struggling retailers should close stores
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....