In The News

Catching Up With Dale Mathews

By: Karen Alberg Grossman

April 26, 2010

With more than 30 years of retail experience including Neiman Marcus and many years of consulting, Dale Mathews knows a thing or two about the financial challenges that today’s retailers face. His specialty at Retail Options is working with independent merchants to create and implement business plans that establish working capital and increase profits. Here, we speak with him about restructuring in a tough economy.

How’s the men’s business lately?

It’s getting better: low double-digit increases for the first three months of the year with good but somewhat mixed results in April (very weather-related…). In general, sportswear is driving sales but custom clothing is also showing signs of life, primarily because trunk shows have been well received. The trick is for stores to adjust their business to the successful trends.

Which are…

Every store is different. But in general, the more successful merchants are moving away from hanging as much suit inventory and are instead developing sportswear for both mature customers and younger guys. Long sleeve woven shirts are still the stellar performers ($95-$140 retail range) and there’s also been action on washed shorts, knit tops and jeans. Sportcoats are getting mixed reviews: the more updated stores are doing well with softcoats while traditional stores are struggling a bit with the more classic versions.

Your expertise is creating business plans: why is that so important?

A written plan is the foundation of any business, and the piece that many stores lack. Most retailers have some form of open-to-buy, inventory control and accounting systems in place but not always a flexible, comprehensive plan that they can adjust monthly.

How do you come up with the right plan for specific stores?

I let them talk; I listen carefully, and then formulate their thoughts into monthly numbers by category. Then I monitor the results with them weekly and we make changes as the situation requires. The key is a plan that allows you to monitor sales, OTB, inventory, expenses (marketing, sales, advertising, etc.) on a weekly or monthly basis in order to make changes. The good news is that with a flexible plan, no matter how bad business gets, there are always adjustments you can make; you’re never helpless or dead in the water.

What’s the biggest mistake stores make?

In most independents, the inventory is still too high and consequently turn is too slow. This is because many independents receive most of their season’s goods within a 60-day period and pay 60 days later. Sales unfortunately don’t work that way; the flow stops, sales often slow and markdowns mount. With the right plan, stores can afford to pay for what they buy and inventory can flow in according to rate of sale. Working with the merchant (and often the sellers), I can help formulate a pattern for deliveries and markdowns; we measure it and adjust it so that there are new goods hitting the floor all the time and consequently margins can be more easily maintained. This system along with the item and vendor advice that I and my partners at DLS supply, help insure our clients a more successful future.

Is credit still an issue for the independent stores?

Unfortunately it is. In many cases, vendors were carrying the short-term needs but they’re having a tough time doing that now.

The big factors are working on a 30-day basis or else you’ve got problems on future shipments. Some clothing vendors are trying to reduce dating from 60 to 30 days with is a real challenge. When you’re talking about a business with a 2.2x turn, expecting payment in this category in 30 days just doesn’t work.

Any good marketing ideas for independents in this economy?

Clearly, if stores don’t have a well-oiled social media campaign going, they’re missing opportunities and probably sales. No one can afford to throw out tons of money on print and broadcast these days. Smart stores are doing a combination of weekly e-mail, direct mail, Facebook and Twitter. The trick is to do it often enough to get a message across in a manner and with content that the customer wants to open and not simply delete or throw away.

I’ve found that the best social media messages are simple and colorful; they need compelling art or photography. They often involve humor. Social media is a great venue for telling fashion stories but non-product advertising can also be effective. For example, Davison’s in Roanoke recently used their media history and archival images for a very successful 100th anniversary electronic campaign.

Another great idea for Facebook is “See and Be Seen.” One of my accounts recently collected photos of their customers from all over town (clubs, restaurants, coffee shops, etc.) wearing clothes they purchased from the store. The customer sees himself on Facebook and shares it with all his friends so the store gets more friends and hopefully more customers.

Other all-important marketing vehicles are in-store events (monthly) and rewards programs. Clearly, events sell product, especially when teamed up with local charities, and rewards programs and gift cards have also been highly successful.

As a consultant, what’s your greatest challenge?

It’s often tough to convince people who have been doing things a certain way for years that there might be a better way to do it. It’s hard to re-learn something after a long time doing it one way.

What have you learned from working with independents?

As you get older, some tend to get more cynical and cynicism can turn to bitterness, which is a big problem. My advice is to have a realistic plan review it often and stay optimistic so that your optimism motivates others. Plus, the more you involve your associates in the plan, the better it all works.

Mathews can be reached at Dale@retailoptions.net.

 

 

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