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Retail Paradox Weekly
Retail News Analysis by RSR Research
July 21, 2009
And the Hits Just Keep on Coming: CIT Failure Considered 'Not a Danger to the System'
By Paula Rosenblum, Managing Partner
7/21/2009
Since the very beginning of our current financial crisis, RSR has repeatedly pointed out that the biggest short-term threat to retailer health was not sales shortfalls, but rather the inability to acquire working capital to fund operations and purchases. As it turns out, we were right. We can trace Circuit City’s demise to its asset-based lender’s revaluation of its inventory (and consequent dramatic reduction of its borrowing base – followed by a Chapter 11 at the worst possible time). We can trace the dissolution of other retailers to their inability to get Debtor in Possession (DIP) financing, forcing them from Chapter 11 to Chapter 7, with no chance to re-organize. Now, just when it seemed like credit was loosening up a little, came the announcement that CIT was in danger of immanent failure.
While the Federal government doesn’t think CIT is important enough for a bailout... More
A Case for Technology as Strategy
By Nikki Baird, Managing Partner
7/21/2009
In May, RSR published our second annual report on IT Alignment. In that report, we found something somewhat controversial: in order to truly achieve IT/Business alignment, it's not so much about IT being aligned with the Business - IT has gotten pretty good at that. It's more about making sure that the Business knows how to make the most of technology.
Now, I've often heard the cry, "We should never have to change our business process in order to accommodate a system!”, but every time I've heard it I've thought... More
Big Bang Theory: Tory Burch Shows How
By Brian Kilcourse, Managing Partner
7/21/2009
“Big Bang” implementations of mission critical enterprise wide systems don’t work - period. At least that is the prevailing opinion of many C-level executives who have no desire to hang their reputations or their company’s immediate prospects on a technology implementation. Many remember such legendary blowouts as Ross Stores’ 2004 flip-of-the-switch ERP implementation. That was blamed for massive inventory and supply chain problems that resulted in unexpectedly poor earnings, and ultimately was a factor in the departure of key executives.
But it doesn’t have to be that way... More
All Retailing is Global
By Paula Rosenblum, Managing Partner
7/21/2009
Retailing remains rife with Paradox. At RSR, we’ve spent the past year talking about the importance of localization. As inventories shrink, the need to target the shelves where inventory purchases land becomes more acute. Making better use of promotional dollars for our most profitable customers is also more critical in a down economy. In our work, we’ve been putting a small twist on the old Tip O’Neill quote, “All politics is local,” and changing it to “All retailing is local.” Imagine my surprise, then, to hear a speech start with the phrase “All retailing is global” and actually understand what the speaker meant.
Last week I had the pleasure of attending a small conference in Mexico City... More
Copyright © 2009 RSR Research LLC. RSR is a tradename of Retail Systems Research LLC. All Rights Reserved
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