If we simply stay focused on bad news we will continue a self filling decline into the retail abyss. Yes business conditions are difficult. Possibly as difficult as they have been in the last ½ century, but retail furniture remains a numbers business.
Is your inventory at the proper level? The industry average for inventory turn is 3.2, what’s yours?
The equation: COGS / Average Inventory = Inventory Turn.
During recent performance group meetings we spent significant time discussing this topic. The question is simply; would you rather have furniture in boxes in the warehouse or cash in the bank?
Back in 1986 one of the smartest retailers I have ever known explained to me during difficult times the key to weathering the storm is to control your inventory. “Spread the floor, decrease density, make each display more attractive, and put the money in the bank!” he’d say.
22 years later I believe this to be the best advice I’ve ever received.
Maybe some of you can use it in 2008