Colin  Pop's In For A Chat

This week I had a chance to pit my niggling economic questions to the man in the know, and pass on his wisdom to MFN readers. So if you are an independent retailer or you are just starting out, you may find his nuggets of information invaluable.

By Ryan Cooper-Brown

Q. Who do you think will be hit the hardest by the dip in public spending in
terms of the high street? Independents/ departments stores/ retail chains/
supermarkets?

A. When trying to guess who will be affected the most or the least by the
credit crunch out of the independents, the departments stores,  retail
chains and supermarkets it would be a mistake to concentrate too much on the
nature of the outlet. What will matter more will be individual attitudes to
pricing - as with all retail, customers will look for the best deals and
prices - and the respective buyers' skills in reading correctly the mood of
customers struggling to make ends meet. Of course, people will still spend.
What will matter more than ever will be who correctly judges the supply and
demand elements to the market.
  
Q. What advice can you give to independent retailers to aid in the lack of
consumer spending and save costs to stop losses i.e. smaller ranges
decreased advertising?
 
A.A good business should operate the same in a credit crunch as in a boom. No
business should take decisions based on market expectations which they would
otherwise have not made. In other words, don't panic. If you have something
worth selling, then advertise as you would always advertise. Likewise, if
you feel that the public is looking for a narrower range of styles, showcase
smaller ranges. But, by and large, have confidence that what you did or
would do in better times will sustain you during harder times.
 
Q.How long do you see the credit crunch lasting?
 
A.If I knew how long the credit crunch will last I would not be in my current
job. More relevant to retailers is consumer confidence. This is something
that retailers at least have some influence over. All businesses should be
mindful that by taking relentlessly about the credit crunch, they affect
consumer confidence and actually end up extending the harder times.

Q. What advice would you give to people looking to start a small fashion
business, is it worth it? Should they hold off?

A. In many ways, an economic down turn is a good time to start any business.
Rents are cheaper and suppliers are more likely to do deals. You are also
consciously or subconsciously more careful in managing outgoings and, if you
prevail through the period, a market upturn means you are well placed to
thrive. I am currently writing a book at the moment on a company set up in
2000. 

 A market rival beat this company to most of the venture capitalists at
the time so they ultimately launched on very limited capital so for them a
credit crunch of sorts. The prudence that this required in the company's
early days meant they established their business on strong economic
foundations. Two years after launching, they absorbed their market rivals
and the company now has a market value of over $3 billion. A credit crunch
may make a business harder to launch but good businesses will see out
economic down turns.

MFN would like to thank Colin for taking Part

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