Today, retailers and their suppliers face plummeting consumer spending and scarce or non-existent capital. AlixPartners estimates that a quarter of all retailers are at risk of financial distress by the end of 2010. This represents nearly a 400% increase compared to one year ago.
Retail sales will likely retrench to levels not seen since the mid-90s, requiring a major shakeout to return to productivity levels shareholders require. While the retail market is certainly challenged by these unprecedented conditions, every major market disruption provides the opportunity for the strong and nimble.
Retailers must act now – both to ensure their own survival and to position themselves for gaining market share from those who do not survive. Most management teams have never operated in these conditions, putting a premium on those who can face facts and act quickly.
AlixPartners is purpose-built for this environment. Our team of dedicated retail specialists has decades of operational experience, with many having spent significant time in the retail industry as management. Additionally, our professionals have significant experience working with retail management and ownership as consultants and financial advisors. We know where to find costs, how to reduce inventory without reducing sales and how to achieve profitable growth. In partnership with our restructuring colleagues, we help retailers manage cash and liquidity, work with creditors and help “extend the runway.” Our collaborative approach to working with management has proven to drive rapid actions and results.