What has to happen in 2009

Many retailers worry about 2009.  They worry that business is going to get tougher, and that it’s going to be harder to survive.

I think that could be true.

But I also think that this means that the better retailers will survive and flourish. 

Many retailers that I’ve spoken with over the past year have told me that they have been using lines of credit to cover purchases.   Some of them have repaid those lines immediately, others have not.  Those retailers that have lived on their line of credit could be headed for rough times.

Now, more than ever, the goods have to pay for themselves.  They must sell thru.  And they must produce more cash than what they cost.  And if they don’t, the retailer must talk to the vendor and return the goods, swap them for others, and get credit.

But most importantly, now is the time that sell thru must be managed by retailers.  Purchases need to be planned well (open to buy) and then those goods have to be watched to make sure they perform.