Steven Cook - Former CEO of Debenhams
“On the other hand, some omnichannel stores have the upper hand. Some retailers charge a fee to return an item online but offer free returns if the consumer brings the item into store. Encouraging consumers into store to return goods in this way drives footfall and gives the consumer the opportunity to exchange the purchase, rather than just return it.”
“Many retailers are struggling with high return rates and it’s particularly hard to run a digital business from a returns perspective. For example, one leading ecommerce brand currently has a 72 per cent return rate, which is difficult to manage.
What’s next?
The coming months won’t be without their challenges. But we’re confident the sector will continue to identify and capitalise on the opportunities among them. We hope this report has shone a light on some of these hurdles, and retailers’ strategies in response. We’re here to help – if you have any questions, please get in touch.
The financial pressures on consumers look set to continue through the year ahead, but it’s reassuring to hear most retailers say that margins are holding up and that they expect to weather this storm. 85% Overall, almost nine in ten (85%) of those we surveyed said they were confident of trading through the next six months. However, the only thing you can say for certain about a forecast is that it is not going to be absolutely correct. The key is to have a plan that is flexible and responsive, with multi-layered contingencies, so that retailers can move quickly to respond to further changes in the environment – both positive and adverse. Keeping a close eye on the fundamentals – ensuring cash flow forecasts are up-to-date, and tightly managing working capital – will be critical. This responsiveness must extend to seeking early support and advice should cracks appear. With time on your side, there is always a greater chance of finding a sustainable path forward, whether that’s adapting strategy, or pursuing formal recovery or restructuring options.
Getting in touch
Alastair Massey Partner Restructuring Advisory London +44 (0)20 3005 4279 alastair.massey@frpadvisory.com
Phil Reynolds Partner Restructuring Advisory London +44 (0)20 3005 4270 phil.reynolds@frpadvisory.com
Notes 1 https://www.theguardian.com/business/2023/jan/02/almost-50-uk-shops-closed-for-good-every-day-in-2022-says-report 2 https://www.drapersonline.com/insight/analysis/are-christmas-returns-crippling-retail
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