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Apr 10, 2018

The travails of the retail businesses

It is rather unfortunate that we have been hearing the announcements made by major retail businesses closing shops and declaring bankruptcy. Over the years, retail businesses have been the most desirable investment opportunities. These are businesses that can be readily presented to the banks and other financial providers for funding to secure adequate loan and capital needed for business growth and sustainability. A major issue that has hindered the long-term plans of many retail businesses is the availability of excess funding from banks which encouraged the businesses to embark on massive expansion drive both locally and internationally. While this may seem like a great idea, the increasing overhead costs and other expenses will quickly exceed the revenue being generated. The outcome of this event is usually indebtedness and subsequently closure and a declaration of bankruptcy.

Bon-Ton, a retail chain which is reported to be about 100 years old recently filed for bankruptcy. These reports came as a huge shock to many of its customers and investors. The closure of its shops throughout the nation was a confirmation that the reports were not “fake news.” Other retail chains that have been under pressure are Macy’s and JCPenny. However, the records show that Kohl’s business has been amazingly increasing even amidst reports that its competition in the industry has some issues. Kohl’s business has benefitted from the closure of Bon-Ton’s shops; apparently, the customers have been left with no choice but to patronize the next option. The sales reports from Kohl are expected to soar in the coming months. This is great news, and as it stands, Kohl’s business model is the focus of marketing analysts. The goal is to find out what Kohl is doing right.

The outcome of these studies will be peer-reviewed and most likely shared with startups and other retail businesses that wish to survive for many years.

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