The retail sector is adept at change; however, recent years have been amongst the most challenging in recent history. Changing consumer preferences, a squeeze on discretionary spending, and a shift away from the high street in favour of online channels has tested the sector to breaking point.
Consumers are dictating the future direction of retail like never before, and a failure to listen to these could spell disaster. From the luxury goods market through to sellers of FMCG, retailers can no longer afford to be complacent. With many big names issuing profit warnings or entering into formal insolvency procedures, whether through increased competition, a failure to adapt to customer desires, or no longer being relevant, the clear message is that no business is guaranteed success. If business models are not evaluated now, they risk being left behind.
Along with the general shift towards e-commerce, other external factors, including Brexit, are also at play and threatening to wreak yet more havoc on an already distressed sector. Although the true effects of leaving the European Union are still largely unknown, shaken consumer confidence and a growing reluctance to complete on big-ticket transactions, is already having an impact.
Despite this, retail is still an integral industry and one which is not going to disappear; people are still willing to spend but the way transactions are completed is changing. With the current challenges come huge opportunities for both existing and new retailers to exploit; we can ensure your business is in the best condition possible to seize these chances when they arise.
RBR Advisory operates with a sector-focussed approach, pairing you up with a leading specialist in your industry. When facing complex problems, our multi-disciplinary offerings grant you the best chance possible of not only navigating but thriving during these challenging times. Going back to basics we will take an objective view of the business and how it compares to others operating within the same arena. Current forecasts will be revisited and mapped alongside current performance levels and the retail landscape as a whole to ensure they still stand up. We will ascertain whether the business is structurally and operationally sound and ensure that time, money, and resources are both well-managed and suitably utilised.
Complex group structures will be examined and if appropriate, a process of business simplification will be undertaken to streamline the business, allowing funds and attention to be diverted towards the most profitable areas. Capital management processes will be carefully considered, including existing supply chain management protocols along with collection strategies.
Retailers in imminent or severe distress may need to consider formal insolvency procedures to maximise the likelihood of a successful turnaround. Retailers operating across multiple outlets or stores may be able to divest of unprofitable locations, or negotiate more favourable lease agreements, immediately cutting costs and improving liquidity.
We constantly monitor the outlook for the retail sector through our Red Flag Alert statistics, allowing us to respond quickly to emerging problems. Recognised as leading industry professionals, we are regularly invited by national and global media outlets to commentate on the changes and challenges facing the high street and other retailers.
In such a rapidly changing sector, transformation should be viewed as a continuous process not a one-off exercise; remaining alert to consumer preferences along with a readiness to adapt is key to maximising retail success.