TRUTH IN RETAILING.
You've got to love Allen Questrom. While he's always been a lovable kind of guy -- except to a few notable exceptions among his old pals at Federated -- Questrom is the very textbook definition of a merchant who is also pretty much a straight shooter.
But even by his standards, things reached a new level a week or two back when he was talking about the dismal performance of the Eckerd drugstore division of J.C. Penney, the place where he is now the boss.
"We screwed it up," he said in a conference call with analysts and reporters. "It shouldn't have happened."
J. Wayne Harris, the guy who runs the division itself, went even further. More or less, he said, Eckerd's main problems were pricing, out-of-stocks, bad real estate, and customer confusion from store remerchandising and shifting planograms.
This kind of candor is absolutely astonishing. (The fact that Harris described a basic meltdown of every single fundamental and essential element of the company's retailing game plan is also more than a little frightening, but that's a subject for some later date.)
The fact of the matter is that guys at this level rarely, if ever, admit to making mistakes of any sort, much less full-fledged screwups.
Retailers are legendary for blaming the weather, non-recurring merchandising events and acts of God for their performance woes. And after the Northeast power failure, you can bet this will be the latest excuse du jour for enterprising retail executives, who certainly spend more time spinning their problems than fixing them.
The truth is that I have never met a retailer who actually blamed himself...until now.
In the meantime, there are signs that perhaps retailers may have to do a little less explaining away rotten business this fall. The back-to-school season in apparel seems to have gotten off to a better start than in the past few years. And while it's still too early to call, maybe this is the year that season not only is once again a viable entity in itself but also acts as a true harbinger of the holiday selling season. Wouldn't that be something?
If that is the case, it would represent one of the great merchandising mysteries of all time. The economy remains infirmly entrenched in quicksand, slip-sliding its way through the first part of the year. All of those tax rebate checks are helping, one can suppose, but they are certainly being canceled out to a large degree by what seems to finally be the beginning of the downside of the refinancing boom. Mortgage rates are up as much as a full point over the past few months and refis, not to mention housing sales, are finally starting to show some wear and tear.
If we are on the crux of a true recovery, it will also likely be the first one ever accompanied by high unemployment and a lack of new job potentials in the marketplace. Sure, business spending seems to be gradually picking up, but it's been the consumer that has underwritten whatever strength there was in the economy through the past couple of years. It's hard to believe we can have a real recovery without the consumer aboard with the program.
So maybe there are still a few merchandising mea culpas out there yet to come. In the meantime, Messrs. Questrom and Harris hereby receive the First Ever Truth in Retailing Award.
Probably the last, too.
Letters to the editor can be sent via e-mail to warren.shoulberg@ fairchildpub.com or via mail to HFN, 7 West 34th Street New York, NY 10001
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|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Aug 25, 2003|
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