By George Anderson
The odds are not in your favor if you are a retailer trying to emerge from Chapter 11 bankruptcy protection, according to a research report from the Clear Thinking Group.
Seventy percent of the retailers studied "were eventually acquired by other companies or had significant assets liquidated." Only 14 percent emerged without a change in ownership or a significant decrease in number of stores.
Jim Welty, chairman, Clear Thinking Group said retailers fail because, "Companies focus on the balance sheet, cash flow, financials, and real estate, while failing to correct the issues that got them (to bankruptcy status) in the first place. In many cases, these companies have poorly developed supply chain and customer service processes. Few have maximized the use of technology to drive these processes. With all the Y2K and ERP hype of the late ‘90s, less than 50% of all consumer marketers have unlocked the power of technology to help drive their supply chain."
Moderator's Comment: What do you believe are the biggest factors in retail store failures? Is there a retailer(s) that you would use as a model for emerging successfully from Chapter 11?
Clear Thinking Group's research indicates that retailers are failing to utilize their technological assets.
We'd argue the failure to utilize human assets is even more of an issue. Despite words to the contrary, companies count employees as expenses to be cut and not as an competitive advantage to be developed. [George Anderson - Moderator]