Three years ago just before the economy was about to plummet into the depths of hell, the boutique that I had owned for 7 years was about to do the same. I had never really had what one could call resounding success but I'd held my own. I paid my bills and had happy customers.
The summer of 2008 was a tough one. Days would go by without a sale and I suddenly found myself depending on credit cards and extended terms. Because I was also in the wholesale business at the same time, I was calling on stores that were also struggling. The writing was on the wall: I had to do something and do it fast. Having worked with a retail consulting firm to help me with my monthly inventory, I called on my consultant for help.
All along I had thought if I made the decision to close my store I would just sell off my inventory, hope to pay off a few of the mounting bills and close my doors. That's what a few of my clients had done when they went out of business. But no, no, no. That was the last thing Mr. Retail Consultant Bob had in mind.
We sat down to discuss a plan. First and foremost he wanted to know exactly how much I needed to sell to pay off everything. "Bob, to pay off all my vendors, credit cards, payroll, rent and other associated costs I'll need about $70,000. There was also the $10,000 that I needed to pay off the landlord for breaking my lease 2 years early. Oops. In my wildest dreams I could not envision making that much.
The next thing Captain Bob did was tell me how much inventory I would need to bring in to make at least $70,000. After I composed myself from my hysterical laughter I told him I thought he was nuts. But he was the "pro"; he had "the plan". He promised it would work. I wondered how my store that had zero customers was going to manage to sell $70,000 in a period of 7 weeks. He gave me that Indiana Jones look and just simply said "trust me".
What happened in those weeks was some type of a miracle. I followed "the plan" every step of the way. I brought in as much inventory as Bob said. Every week I placed an ad in the local paper that my discounts were going deeper. I endured the daily "why are you closing" questions and the people that told me how sorry they were I was closing. The ones I didn't recognize as ever having bought a thing.
I had a hard time with was the fact that I had to bring in inventory that wasn't at all my taste, which Mr. Bob told me to throw out the window. So when the needlepoint looking cat print jacket came in, I wanted to vomit all over it. Until 5 of the 6 that I received were sold. As the discounts got deeper, the clientele changed. Anyone not caring about faded, torn or damaged merchandise came in and bought it like it was gold.
All told, I went from being empty everyday to hiring extra help to handle the crowds. I did more in a week than I had in a month. The bills were getting paid, the debt was going away and my stress levels were coming down. Closing day I was left with only 2 bags of clothing and jewelry at a wholesale value of $1,200. And the bills were paid. Not too shabby.
Had I known the little secrets to making money, REAL money in retail I would not have had to close. It's all a game and I guess I played it well. I have learned that going out of business is a real business. It's a certain way to get people into your store. And by the way, I do have 1 cat jacket that I saved if anyone is interested.
Filed under: Uncategorized