Playing the blame game

It’s ‘too easy’ for retailers to blame external elements for their poor sales performance says the CEO of youth fashion chain General Pants.

Craig King told Australian Retail Outlook the biggest challenge for Australian retailers in the next 12 to 18 months is overcoming consumer malaise.

“I think it’s too easy to buy into blaming external elements like online or the high Australian dollar.

“I think the biggest struggle that everybody faces is that the consumer has gone into this pattern where they just buy what they need and not above that. We need to keep finding compelling reasons to get the customers coming back and engaged. It’s about standing out for something amongst a sea of everything,” King told Australian Retail Outlook.

General Pants has 42 stores across Australia, half of which are in NSW. It’s focusing on westwards expansion this year following a significant injection of capital from the sale of the group’s 38 Surf Dive ‘n Ski and Jetty Surf surf stores a year ago to Billabong.

“Far and away the biggest concern is consumer sentiment and their changing attitudes when it comes to purchasing. There’s plenty of talk about the internet and big internationals moving in, but the real shift is spending habits and what it takes to get a customer to part with their hard earned,” he said.

“We believe in being really targeted at 18 to 24 years. I think any business right now should target like that. We have this saying: “When the tide’s out, you can see who’s swimming naked.” It really comes down to whether you know your customer. If you don’t then you’re hedging your bets during tough times and you’re not useful to anybody.”

King said it annoyed him that some retailers take “a really big shotgun approach to target everybody”.

“In fashion if they try and do that, they’ll end up servicing the mid-market then they’ll have a lot of product left over that won’t sell. Then they inevitably end up with all this excess stock and lots of markdowns because they don’t have a customer to sell to. That ends up making a bit of a mess of the whole thing.”

King said last year was a challenging one, but he wasn’t expecting it to be otherwise.

“It certainly tested strategies at times, as there were several swings in momentum. On the whole we achieved what we set out to do but it requires focus and a lot of effort.

“I reckon we found success in the end due to being geared up for that tough year. I think in your cost structure you have to plan for the worst, but on the front end you have to chase as many sales as you can. If you can change your situation throughout the year, then that’s great. But if you can’t, it’s good to have a contingency.”

King is one of nine senior executives of Australian retailers interviewed in Australian Retail Outlook, a full colour, perfect bound publication reviewing the 2011 trading year and projecting trends and performance in 2012 and beyond.

The 80 page book also includes the results of a poll of 500 Australian retailers, including detailed selected responses on issues like consumer confidence, landlord relationships and the offshore online threat.

Australian Retail Outlook is published by Inside Retail and available exclusively from RetailBooks.com.au or by contacting the office on 02 9901 1800.

In his interview, King goes on to discuss the importance of staying on strategy when times become tough, engaging customers through new technology and the impact of the Australian dollar’s value on the General Pants business.

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