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Happy Holidays: Not for Many Retailers or Developers

CLOSTER, NJ-Deep concern about both the credit crisis and cutbacks in consumer spending has translated into retail strategies marked by caution.

By Alyson Grala | Updated on November 13, 2009

CLOSTER, NJ-The line between outlet stores and mainstream retail is blurring this holiday season as even upscale and luxury chains ratchet back their inventories and slash prices. The success or failure of these value-focused strategies will determine whether some operators manage to stay afloat in 2010, according to Alan Cohen, chairman of Abacus Advisors, a Closter-based turnaround and restructuring firm.

“You can learn a lot simply by walking into stores and observing,” says Cohen, who has more than 30 years of experience working with distressed businesses in all aspects of management and operations. “Throughout the summer and fall, stores at outlet malls like Woodbury Common [in Central Valley, NY] typically are full of great stuff,” he continues. “However, this year, inventories appeared to be light at the likes of Neiman Marcus’ Last Call or Saks’ Off 5th. Since these and other better retailers were discounting heavily in their mainline stores, they didn’t have as much excess inventory to send to their outlet locations.”

Deep concern about both the credit crisis and cutbacks in consumer spending has translated into retail strategies marked by caution, Cohen notes. “Manufacturers produced less, and retailers ordered less. In the run-up to the 2009 holiday season, everybody was in a conservative mood.”

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