By Barry Lipsett
President & Owner
As the economy begins to recover, it may be time to review your business’ strategic plan. At Charles River Apparel we recently reviewed our company’s plan as it related to the recession and assessed its success. Through careful planning I am pleased to say that Charles River Apparel emerging from this recession even stronger.
No matter what stage your business is at, what we have learned can help you make plans to help your business emerge even stronger. Items to consider:
· Over the past 18 months real estate prices have plummeted, so now may be the perfect time to look into purchasing depressed assets such as real estate. Usually you see real estate prices falling when mortgage rates are increasing; instead they are at historic lows. If you are renting, and you can pull it off, you should consider buying property and pay rent to yourself. In our case we purchased a building in 2009 that allowed us to create more operational efficiencies with a better building with higher ceilings and better overall space. Not only was this helpful to the operational side of our business, but our employees love the newer, larger facilities and have the space they need.
· Other depressed assets you may want to consider…buying more inventory. The price of apparel has fluctuated during this recession but now as the recession seems to be ending, it could be the time to increase your buys when deals are good and before inflation returns. At Charles River we have 43% more inventory on order than previous years.
· Operational efficiencies are more important during a slowdown in sales, and it is important to make sure that you have invested in the right software and training to maximize your operations. We invested in both more computer training and a new warehouse management system last year. We anticipate that this will help to decrease labor by 20% during our busiest months.
· Another strategy we employed to help Charles River Apparel emerge out of the recession even stronger is to develop underperforming markets. We identified the College Bookstore market to re-focus on and hired a national sales group to help us grow it.
I recently read a Harvard Business Review (www.hbr.org) article that studied the best strategies to combat the recession. Their results included increasing operational efficiencies, developing underperforming assets and developing new as well as underperforming markets. This article and Charles River Apparel’s recent increase in sales, makes me firmly believe that we are moving in the right direction.
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