http://blog.interimpartners.com/retail-interim-management-2009.html Encouraging debate and discussion within the interim management sector Wed, 28 Jul 2010 15:09:59 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://blog.interimpartners.com/retail-interim-management-2009.html/comment-page-1#comment-66 James A Pow Mon, 26 Jan 2009 11:32:23 +0000 http://www.interimpartners.com/blog/?p=41#comment-66 I attended a restructuring dinner in April 2008 hosted by one of the VC's. On the evening a straw poll was taken as to when the economy might start to emerge from the ominous climate then materialising- 79% predicted not before 2011 at best! The scale of the downturn has really only been understood early by the volume retailers who have seen the "levers" moving out of synch within the supply chain. Those that really understood these tell-tale signs moved quickly to offset their future stocks and decrease their forex exposure. However the scale of the lack of confidence within consumerism and the accelerated move to value purchases made many retail propositions completely untenable. This combined with over-exposure in their supply chain and disastrous exposure of forex in their margins left many with no where to go, trading quietly towards obvious default on quarterday's rental and administration. The very scale of defaults, moving through and from the banks to the over-committed latter highly leveraged purchases in all sectors has fueled the consumer awareness to real survival in 2009 and beyond. Scale and models will have to change to adjust to a very different landscape moving forward, and restructuring and survival will be the stock trade of 2009/10. I don't believe that we will really see the full scale of the climb required to move out of this recession until March/April this year, and my instincts suggest a much higher unemployment number significantly beyond 3 million! There will of course be opportunities, but cash will be king in any business for the forseeable future, and that means trading very differently from past and many current practices. In past downturns the luxury sector have been more or less unharmed- this time they will also feel the pain! I attended a restructuring dinner in April 2008 hosted by one of the VC’s. On the evening a straw poll was taken as to when the economy might start to emerge from the ominous climate then materialising- 79% predicted not before 2011 at best!
The scale of the downturn has really only been understood early by the volume retailers who have seen the “levers” moving out of synch within the supply chain. Those that really understood these tell-tale signs moved quickly to offset their future stocks and decrease their forex exposure. However the scale of the lack of confidence within consumerism and the accelerated move to value purchases made many retail propositions completely untenable. This combined with over-exposure in their supply chain and disastrous exposure of forex in their margins left many with no where to go, trading quietly towards obvious default on quarterday’s rental and administration.
The very scale of defaults, moving through and from the banks to the over-committed latter highly leveraged purchases in all sectors has fueled the consumer awareness to real survival in 2009 and beyond.
Scale and models will have to change to adjust to a very different landscape moving forward, and restructuring and survival will be the stock trade of 2009/10.
I don’t believe that we will really see the full scale of the climb required to move out of this recession until March/April this year, and my instincts suggest a much higher unemployment number significantly beyond 3 million!
There will of course be opportunities, but cash will be king in any business for the forseeable future, and that means trading very differently from past and many current practices.
In past downturns the luxury sector have been more or less unharmed- this time they will also feel the pain!

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