Retailers Get Ready for Back-to-School – 6/10/09
Classes have yet to let out for the summer but quite a few people in and around retailing are already looking toward the back-to-school season as the next test of just how well the business is coming along.
“I’m not arguing that business is going to be positive,” Jeff Van Sinderen, a retail analyst with B. Riley, told Reuters. “I’m arguing the declines will start to moderate, that’s what we’d like to see happen. If business is up, I’d be surprised.”
“The question to me is the amount of the decline, and probably low single digits would be our guess,” said Sandra Reese, principal at Grant Thornton Corporate Advisory and Restructuring Services, who also spoke with Reuters.
An emphasis on trimming inventory has some hopeful that while retailers may see a slight dip in year-over-year sales, they might be able to squeeze more profits from dollars spent. Recent reports have suggested that merchants are engaging in much less discounting than they had toward the end of last year and the beginning of ’09.
Discussion questions: What are you looking for in the upcoming back-to-school season? Do you think there will be any surprises? Will we see retailers doing things a bit differently to find the right emphasis on top and bottom line growth?
I do think we’ll see signs of life this back-to-school season. The students themselves will drive some of it, because their spending power has not taken a hit from stock or housing losses. The best of the retailers out there will continue to innovate and offer cool must-have apparel. My concern is that with so many retailers still unable to get solid financing, most will play it safe, get too basic and alienate the core customer. The winners are likely to be the H&Ms of the world, who have shown the ability to continuously source and deliver great looks at terrific prices. I predict a reasonably decent BTS, leading into a reasonably decent fall and holiday. But only because last year was so dismal. The weaker players will file Chapter 11 in growing numbers and the strong will significantly grow market share. Watch for newer niche players with no debt and interesting products/concepts to rise up.
Mike Osorio, your Dare to be Contagious! ™ strategist
What do you think? Please add your comments and add to the discussion!
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