Shareholders A Retailers Worst Nightmare

As I go through this mall and I see an anchor store that is no more. This one anchor had been in business for well over a hundred years. It made numerous mistakes under unseasoned leadership. This is when your credentials might be absolute garbage to an organization. It's obvious this CEO had never run a retail chain in recession economy. It had a great branding that it totally trashed under the pressure to give shareholders dividends that the store didn't have. It bought clothing that was sub par. If it had good brands, you couldn't tell. It was starting to look like a store of lessor quality.

It put it's shoes out on the floor instead of having staff go to the back room to get them for the customer. This resulted in high theft rates that ate into any of their profits. It bought limited merchandise in select sizes so it didn't cater to the majority. The styles that it did bring in looked very dated. This contributed to its low sales. If it had continued to focus on quality and was stricter to allowing its branding to be carried in other markets that might of helped.

It was obvious to see they had a cash flow problem when they bought a retail chain that was to a low income market instead of a middle class market which was their original target market. It should have looked at their notes if they even kept any on how they were able to stay afloat in the 1920's and 30's. This is why companies need to take seriously how to run a business. There customer service in their stores was very surly in the end of its demise. 

I've recently seen two more retail chains seriously looking at their inventory and who is their customer to make sure that aren't the next one to die. They are merchandising each store appropriately to its individual customers. Both are looking like a fire sale as they scramble to get rid of merchandise that no longer fits. It would make more sense to spread that to its other stores that do carry those brands and whose customers it does sell too.

They are also trying to attract an unfamiliar market by trying to attract new clients that they'd previously not marketed to before. This will likely be a fatal move, since ethnic communities usually frequent their own community and it is only second and third generations that start to branch out. These shareholders have become spoiled by good economies expecting unrealistic dividends in down economies. It would make more sense for these retailers to buy back their shares to have more control so they can ensure the survival of their companies.

Unfortunately most of these CEO's have no real knowledge of how to run companies like this. Which actually makes them a liability instead of an asset. This will be a true test of survival of the fittest or the most adaptable.

Penny J. (MN, USA)
Raven Hawke, Llc
info@ravenhawke.net
www.ravenhawke.net