The so-called “retail apocalypse” started long before the coronavirus and COVID-19 pandemic. But as the global pandemic prompted “stay at home” orders across the U.S., retailers temporarily shut down tens of thousands of stores and furloughed more than a million employees.
As RGP VP of Restructuring & Bankruptcy Advisory Thora Thoroddsen writes in the April issue of Turnarounds & Workouts, every business should be planning now for how they will survive this crisis and, ultimately, return to financial health. For retailers that are able to nimbly respond and transform their business model, this global pandemic could be the catalyst for a return to financial health.
A few key points:
- Retail recovery plan: No one knows how long this is going to last, so companies should do everything they can to preserve the cash they have—or that they have access to.
- Curbing costs: Retailers are having to make tough decisions—like whether or not to continue paying their employees and paying rent.
- Bankruptcy could offer a lifeline: Use this time to evaluate strategic options and prepare for the best alternative when things reopen.