The Waldoff Group
Retail Solutions Especially For Independent Stores
An action plan for women’s specialty stores!
Presented by Milton Waldoff, February 16, 2009
WWIN
WomensWear In Nevada
RIO Hotel & Casino - Las Vegas, Nevada
(Copy of this talk below)
Good Afternoon!
I appreciate having this opportunity to share some thoughts on how you might survive this once in 80 year economic crisis.
I’ll be brief, and I’ll be available after the meeting to visit with you or make an appointment for later today or tomorrow.
It is not necessary to take notes, a complete copy of my remarks will be available for you at the rear of the room following the luncheon.
If there is one thing I've learned in my over 40 years in retail, no one survives because they are entitled!
I assume there are some store owners here today who had a terrific 2008, increased sales, improved gross margin and made a profit they are proud of …
It is to those of you who did not have a terrific 2008 and are concerned about survival that my comments today are addressed.
At this moment you and everyone in retail are concerned about surviving this very unusual economy!
No one knows how long it will last, how many more jobs will be lost, how many more stores will close, how many more banks will fail, how many more car dealers will close, how many more businesses of all types will cease to exist.
Since January 1st more people lost their jobs in the United States than ever before during a 2 month period, the most in recorded history. Over one million jobs were eliminated, and this million does not include small businesses who typically do not report their layoffs and terminations, so it is considerably more.
It is good that our government recognizes the dire situation! Whether the trillion plus dollars they are appropriating will work, we’ll have to wait and see! At least they are doing more than simply talking about it!
Some of the biggest, best and greatest stores that ever existed in the United States are gone and more will die before this economy recovers.
Even at that, there will be many retailers that survive and live to play another day!
There will be many, many ladies specialty stores that survive!
The important question for you is …
Are you doing what is necessary to survive?
Retailers as a group have a mentality of optimistic worry!
I am personally very optimistic there is a way to operate profitably in this economy, and we’ve been proving it with stores like yours.
We know it is not continuing to operate in the same manner as we have been operating.
Personally, I am of the opinion that the retail business will get worse before it gets better, maybe in 2010, maybe in 2011 … who knows, perhaps in 2012 or later.
Operating in the manner we’ve operated for years has not worked in the last few years and it will not work in the future, and the future is now.
It is very important that we recognize the situation for what it is and take immediate action!
That will require difficult decisions!
One of my great mistakes when I was a retailer was not making difficult decisions early enough and then taking strong enough action - quick enough!
You must do what you must do to live to play another day! Don’t take anything off the table! Do what you must do!
Some of the things I strongly suggest to clients are:
- Control your inventory! You must use a realistic well planned Open to Buy with inventory allocated by department in direct proportion to sales.
- Calculate real dollars to the bottom line! Look at and understand your data by department, looking at margins and sales per square foot.
- Develop a realistic budget for your expenses! Keep your expenses in line with your budget! Review your expenses to budget constantly, make adjustments immediately!
- Analyze vendors by performance! In terms of maintained mark-up, mark downs, turns and profitability!
- Never over buy unless you have a plan to move the extra merchandise! Too much merchandise can be a killer! You must have turn to survive!
- Buy less and more often! Just like you do fruits and fish at the super market. Keep in mind you don’t want to put anything in the freezer.
- Buy some Off Price on every trip to market! Desirable off price to me is 40% to 50% off current season goods that you hand select by style, color and size. Of course you might have to settle for a less, however push for more! You will get it more often than you expect. Every vendor has off price … items they cut too much of (or sold to little of), orders they could not ship because of store credit problems, orders that were cancelled, merchandise that arrived after the completion date, yet still in season.
A vendor that says they cut to order and never have off price is lying! Have you ever prepared a meal for 12 and had nothing, zero left at the end of the meal? If so, some folks left hungry. Vendors are not perfect they can not anticipate how every item will sell, no more than you can! They give the off price to someone, why not you?
- Make more market trips! You will make less mistakes by buying less and more often! Styles change, customer wants change, colors change … stay flexible! Keep a fresh flow of merchandise, the flow should be about the same retail dollars as sales + markdowns during most months! The extra cost of the trip will be justified in profits.
- Take advantage of the market with LBA’s expertise and services! LBA is the best ladies specialty store resident buying office catering to small stores who focus on a moderate to better price points! Stay in touch and let them know what’s happening in your store. Communicate on a regular basis.
A good New York buying office like LBA will more than justify their fee with advice on what’s hot and what’s not, whose got what, who to shop, who to not waste your time visiting, styles that are re-ordering, who’s got off price or special promotions and information on next season. You should keep trying new lines and weeding out lines that are not performing and vendors that don’t fit and don’t ship on time. Depend on LBA for new vendors and new trends … make them your eyes and ears in the market! You’ll get treated special in the market when the vendor knows you are represented by a resident buying office like LBA.
- Take fast markdowns! If your customers don’t like it enough to buy it after 30 days, what makes you think they will like it any better in 60 days! Get it out of the store so you can try again.
- The most important tool a retailer has to correct a buying mistake is a markdown! Everybody makes mistakes! Recognize yours early and take quick and immediate action! Remember the first markdown is the best markdown. Take it early and in this economy it should be at least 30%. Keep marking it down until it is out of the store! Only wine, whiskey and women get better with age!
- We encourage our clients to go through their store every Monday and search for items to mark down. Yes, search! The days of running two sales a year is over! If you don’t understand ‘turn’ check our blog for a better understanding!
- Never ever carry over anything from one season to the next! Never! It will not be worth as much next year! Fast ‘turn’ will result in increased gross margin!
- Make certain your staff understands the problems you and all retail stores are facing in this economy! They must be motivated and understand it is going to be easier to do what is necessary and required than locate another job!
- Give your employees the leadership they need! Motivate, motivate and motivate! Be positive and realistic with each of them daily! Expect more of them than they expect of themselves.
- Spend as much time on the sales floor as humanly possible! Set an example in greeting people that come in the store. Set an example with your salesmanship and customer service!
- Make sure every person that enters the store is greeted and treated like your best customer! Never prejudge a person that enters the store! You never know who might just be the biggest sale of the day or become a regular good customer! Customers go to specialty shops to get assisted by a caring and knowledgeable sales person.
- Remind your sales people that good salesmanship is selling in a manner that motivates the customer to come back and ask for them! It requires caring in store attention and follow-up after the sale with a phone call and a thank you note!
- Require these phone calls and thank you notes! Again I say, set an example by your own actions and monitor their actions! Let them see you are doing what you ask them to do!
- Do not tolerate a non performer on your payroll! They will undermine the attitude of your good people! Hire slowly and fire fast.
- Improve communications with your customers and potential customers! Monitor what works for you and what does not! I know for a fact that advertising works! John Wannamaker once said, he knew that 50% of his advertising did not work he just did know which 50%! He also knew he had to be ‘top of mind’ with the public at all times!
- Stay focused on your core business! Analyze, analyze, analyze!
- Be creative with your promotions! No one comes up with more creative ideas for ladies specialty shops than T. J. Reid. Her publication ‘Fashion Advantage’ is packed with ideas you should be using to improve your relationship with your customers and your community.
- Thank your customers for shopping in your store! You can’t say ‘thank you’ enough, and you can’t express ‘your appreciation’ for their business enough!
- Never hesitate to say to a customer you appreciate their business! See how many times you can say it one day!
I appreciate this opportunity to visit with you today and hope we can spend more time, one on one, talking about your business and how The Waldoff Group might assist you in improving sales, gross margin and profits!
Working with retailers like you across the country allows us to see problems and find solutions. Most merchants are so busy operating their business they simply don’t have the time or staff to find the right solutions and implement them. We have the knowledge, time and motivation to recognize, find solutions and implement them.
Our business is: ‘Retail Solutions for Independent Stores’
Our focus is: Women’s Specialty Stores
Look at our web site: TheWaldoffGroup.com
Read some of the letters we have gotten from clients. You will see what some of our current and previous clients have to say about working with The Waldoff Group.
Don’t hesitate to phone, we’ll share references, many of whom you might know.
Survive this unusual economy so you can play another day!
Thank you for being here today!
I appreciate you!
Call: The Waldoff Group - 601-268-2079
Milton Waldoff - Direct 601-434-3000
Email: TheWaldoffGroup@Comcast.net
Visit: TheWaldoffGroup.com
