The beginning of New Year is a popular time for businesses to be closing downs shop, with their lease beginning to expire and the efficiency evaluations bringing the unprofitable stores in light. When businesses start thy try to expand their business as broadly as possible as to better reach possible consumers. But it has become a recurring trend that when the company begins to be worth more and more, these chains close down a large percentage of their chains.
As to why they might be doing this a history lesson may be required. At the end of World War Two the Americans were badly outnumbered by our enemies, and even our allies would risk collapsing their base infrastructure if they even tried to help us for they could barely take care of themselves. President Eisenhower had 156,000 troops to deploy into eight possible vantage points. If he was to evenly distribute them all into all of the areas he would end up with 19,500 at each section. In war this amount of people is otherwise known as "basically nothing." There would be no possible way to make a profit from them, they were just simply doomed if he were to take that route. So instead you know what he did? He orchestrated the largest amphibious attack in history. With the help of the Western Allies he created the Invasion of Normandy commonly known as D-Day.
This is essentially what those businesses are trying to do, get rid of their unprofitable locations and instead relocate to urban areas as to reach a safer requisition to their bet of investing their saved money into a new product, idea, or industry. For example America's largest store chain, Macy's, is cutting down 68 stores, 10,000 workers, and healthcare benefits, all with the hopes of saving more than 550 million dollars per year. They are going to put this money into growing the digital business, store-related growth strategies, new in-store concepts like Blue-mercury, the chain's makeup line, the cut-price Macy's Backstage chain, and expansion in the China area.
But it is not just Macy's which is participating in this ordeal, and it's not all just good, a lot of it is bad news. Sears's Chairman recently sent out a letter filled with all sorts of bad foreseeing saying that tectonic shifts in consumer spending which had previously been stated as having to been not correlating to businesses is now being counter proved.
All in all the recent retail allegations are both a mix of the good and the bad but mainly just the formality of the starting in regard to the new year.
No comments:
Post a Comment