Must Retailers Restructure To Survive?
While almost every industry has been adversely affected by the COVID-19 pandemic, there are few where the impact has been more obvious than retail. Famous retail brands have gone under, as they were forced to shutter their stores, accelerating a trend that was already in train long before the pandemic; in the US alone, literally, dozens of established retailers have filed for bankruptcy so far this year, as declining sales and mounting debt finally overwhelmed them.
What does retail need to do, to survive?
This is a question I consider in the paper I have written for Mythos Group, in which we consider five key areas that retailers need to address if they are to be viable in the COVID era and beyond.
1. Employee and Customer Safety
2. Corporate Restructuring
3. Transition to Digital
4. Supply Chain Resiliency
4. Understanding Consumer Behavior
Corporate restructuring can seem like the last resort of the desperate, but it does not have to be.
Restructuring To Survive
Given the retail industry’s high dependency on cash, retailers should assess the dynamics of their working capital and evaluate their financial stability under a variety of scenarios. All options should be on the table, including:
- Renegotiating financial obligations with lenders
- Taking advantage of government hardship programs
- Making temporary store closures permanent
- Considering filing for bankruptcy
- Establishing new partnerships, and/or considering potential mergers and acquisitions.
If ever there were a time to think the unthinkable, this is surely it.
Mythos Group’s white paper, Post-COVID-19, Reimagining The Retail Sector, contains more detail on this and other recommendations, and is available to download for free from https://bit.ly/MG-White Papers.