Wheel Turning in Retail Universe
August 13, 2007-- Home Textiles Today,
Anybody else around here wondering if everything old may be new again?
My association with this industry began seven years ago, give or take a few months. American mills were king, although we didn't realize at the time that several would shortly find themselves in bankruptcy. And while retail consolidation was already underway, Bradlees, Ames, Caldor, Montgomery Ward, Strouds, HomePlace and others that have since departed were all still doing business.
Already, suppliers were talking about the old days. Early in my tenure, a veteran recalled wistfully, "I used to have 250 accounts. Now I have 12." He wasn't the only one to say so. That sentiment evolved in rather short order to: "There are only five or six accounts that matter."
What's the health of today's major accounts? Bed Bath & Beyond and Macy's are both rumored to be takeover targets. Linens 'n Things, which has already been taken over, is 18 months into a nine-year (!) turnaround plan. Sears and Kmart have been converted into cash cows for an investment master.
Which leads me to wonder whether some of the big accounts are standing today where the big mills stood at the dawn of this decade. Are some of the big accounts destined to follow now-defunct regional retailers into the pages of history? And if so, does this once again become an industry that chases 250 accounts — or more?
Companies that still think that six or seven customers are the cornerstones of the universe might ask themselves how many bad headlines in the business pages does it take to make your marginally profitable business not worth doing? How many markdown dollars are too many?
I heard a lot of anecdotes last week from suppliers, about walking away from some substantial pieces of business. I also heard a fair amount of talk about taking on reps to hunt down smaller accounts and off-the-beaten path accounts.
The wheel is turning.