You loose - I win, retailers enjoying the downturn….
‘Companies with a better defined corporate governance model do well in almost any situation’. This is the lesson learnt from what’s been happening in the retail space over the year.The recession in the last two years may have shaken the best of industries & companies but there’s been a dual impact on the retail sector. Brands stayed away from new partnerships with retailers (so far, vacancy rates have gone up & ~10% of malls might close) & on the other hand consumers stopped spending. So how are some players gaining in such circumstances ?Here’s what the story is, bankruptcy of some retailers have positively affected other retailers. These strong players have consolidated and have gone bigger.
It’s not about being recession proof for these retailers but about being that much tougher in facing the situation & creating a niche market for products which enable consumers to save money. The bankrupt retailers list includes Dial-a-Mattress, Filene’s Basement, KB Toys, Circuit City, Mervyn’s, Steve & Barry’s, Linens ‘n Things etc.
I found a list of such retailers which have gained since the recession began near the end of 2007:
1). Aaron’s (Revenue increase since 2007: 21%)
2). Aeropostale (Revenue increase: 28%)
3). Amazon.com (Revenue increase: 38%)
4). Priceline.com (Revenue increase: 46%)
5). Staples (Revenue increase: 26%)