We all know that small retailers have faced incredible challenges over the past two years as spending slowed, credit tightened and costs escalated. Too many doors have closed, crushed by a combination of weak traffic, debt and bad planning.
Unprepared for the depth and complexities associated with the economic meltdown, many independents couldn’t handle the firestorm.
Despite the tough odds, the best and most resilient merchants are still alive, but they are hardly out of the woods. While there has been some improvement in retail sales, consumer spending remains far below the level seen before the meltdown, forcing even the most established players to endure a slower-than-expected recovery.
Many of the survivors are still shell-shocked. Managing credit lines and cash flow continue to be huge issues that determine the amount and diversity of many retailers’ seasonal buys.
Unfortunately, a number of small doors have coped with the situation by buying less.
This is counterintuitive at a time when retail is struggling. The fact is that most independents have built their reputation by offering a unique mix of established and new names. Eager to separate themselves from department store offerings and branded boutiques, they have historically embraced young talent, small brands and over-the-top styles.
The more conservative buying stance has set off a chain reaction in the industry. Young designers and brands that have relied on the creative risk-taking of the small door now find themselves with less real business and fewer new prospects.
The resulting shakeout — the closing of some labels, trimmed lines and many designers abandoning their own collections for the safe haven of corporate design jobs — will have a lasting and potentially damaging impact. This has been a pivotal moment as the industry deals with the aftermath of the meltdown and the new reality of a diminished pool of independents.
While there is no easy answer for this complicated turn of events, it is critical that smaller retailers rewrite their mission plans to adapt to the serious changes in the marketplace and then stay on their game.
How can they do that?
Now is the time to focus on the things that set them apart from the competition, including product mix, service and environment. It is vital that smaller brands and smaller retailers seek common ground and work together to ensure their joint survival by setting up realistic financial parameters that both sides can live by.
Of course, the bigger brands continue to play a dominant role in this dramatic story. With the resources to be somewhat patient with their small accounts and set up reasonable expectations in this crucial time of need, the smartest are — and will continue to be — an important lifeline for independents.
While the future still remains full of challenges, most feel the worst is over. When the recovery solidifies, the small doors that have weathered the storm can focus on a new, brighter future. And the industry can rest easy that a more vibrant independent base will be a key part of the footwear story for many years to come.