Blog: US giants adapt to market adversity

Joe Ayling | 11 April 2008

It's the final day of the World Retail Congress here in Barcelona, and after much talk of emerging markets, the agenda briefly turned to trading in the world's very biggest economy.

This morning's speakers have shed some light on buying habits amid a near-recession in the US.

Matt Rubel, the president and CEO of Collective Brands, which runs the Payless ShoeSource and Stride Rite chains, said that although bargain shoppers have tightened their purse strings, there are still margins to be made at higher tiers in the country.

Many retailers in the US marketplace, with Wal-Mart a notable exception, have been posting monthly sales declines as the sub-prime mortgage crisis filters down into consumer spending habits.

However, experts here say that retail operators who get their branding and inventories right in the midst of this slowdown can be opportunistic, while others may fall by the wayside.

Quick stock turnover and evolving within core brand values are also part of the survival kit during the race for market share.

Many meetings of minds can throw up more questions than answers, but this week's event has delivered some firm indications of where fashion retail is heading.

It seems that emerging markets like BRIC (Brazil, Russia, India and China) have ample potential, with finding the right local partner to help a launch or distribute a brand key.

On the other hand, the restraints of aggressive competition, real estate demand, local knowledge and even rising inflation mean that caution is required.

Developed markets, meanwhile, seem more ridden with saturation than opportunity at the moment, and brands are tackling a more prudent consumer.

In summary, as the retail business evolves in the face of globalisation there are three choices for Western brands - expand, improve or do both.

By Joe Ayling, news editor.


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