American retailers surely have a tough time ahead in general. But it is the retailers catering to the luxury segment, who will be the most desparete in coming months.
'Value for money' is the current mantra. It may change in future but in the short term, better value is the biggest driving force for business.
The only silver lining is that luxury retailers who focus on providing exceptional 'customer service' may barely survive this desparate downturn.
In contrast, retailers who are focussed on bringing better deals to the average consumer, may actually see decent profit in the current time.
My opinion is based on my +6 years of management experience in retail industry.
I was a retailer in the Hamptons. A resort area for the very wealthy. The only stores that can survive are the ones that cater to the wealthy. All the smaller stores that catered to the middle class are closed. Mine included. We do not charge enough to make enough to cover the cost of the store. There are stores here who charge $550 for a dress, $1,200 for a handbag, and more. They don't have to sell as many items to survive and they have other stores open to pick up any slack in the Fall/Winter when our resort area is not inhabited by their clientele. It appears that middle America is suffering and it actually has been going on for over a year. They are trying hard not to spend all their money on frivolities. Look what happened last year, over 50 retail store chains closed "under-producing" stores to shave back costs. K-Mart and Wal-mart and such had let go of alot of employees and Did not hire for the Holidays this year. The lines were endless. Right now, there really is no way to know if this is going to get better anytime soon. The Stock Market has been steadily rising but no one has a clue as to why. To tell you the truth, I have a feeling that is not going to last either.
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