Tuesday, February 09, 2010

Why We Love Independent Retailers and Why I Hate Wal-Mart

I read an article Friday in MR Magazine's daily newsletter, MR Marketplace, which I highly recommend reading for it's insights into men's clothing and retailing in general. The article "Wal-Mart Axes 300 HQ Jobs" mentions the following:

"Wal-Mart plans to cut around 300 jobs at its Arkansas headquarters as the US retail giant looks to boost efficiency throughout its operations.

In an open letter to head office associates, CEO Mike Duke insisted that the cuts were necessary for Wal-Mart to deliver "quality and value".

"A core part of our culture is to continually look for ways to be more efficient - to operate for less so we can sell for less," he said."

Let me start by saying that last year, Wal-Mart earned $401.2 billion in revenue in 2009, a 7.2% INCREASE from 2008 (from this SEC filing). That's right, they had a 7.2% sales increase and they cut 300 American jobs. Absolutely unbelievable. We at Rothco believe strongly in running a tight ship and controlling expenses, but this is just using the recession as an excuse to cut jobs (in fact, we are fortunate to have never had a layoff in our 57 year history).

I speak to hundreds of retailers each week and, Army Navy and related military dealers have, in general, faired better than most in this recession. Nonetheless, I still know some folks who have struggled and have gone through gut-wrenching decisions regarding their employees and made many sacrifices in order to save every single job possible. For the independent retailer, those employees are their friends and neighbors, the folks they see at church, the grocery store and the soccer fields. Losing even one staff member to the recession is a huge loss to these business people. Yet Wal-Mart finds a reason to cut 300 jobs when their sales are way up.
Now that I've vented that, let me tell you the good news: in the past year, Rothco has added more new Army Navy Surplus accounts than we have in many years, 265 in all in the past year, 38% more than the year before. A number of established retailers have opened new stores and many new stores have opened for business. I believe that much of this is because, in a recession, Army Navy stores are seen as a great value offering quality products at low prices. Many of the new stores are doing very well, even in this tough climate. One of the biggest differences between successful and unsuccessful retailers is the amount of continued effort they make to grow their business, especially during tough times. Storekeepers must continue advertising, promoting and reaching out to their customer. They also must ALWAYS be offering new products.
That's the other good news. Rothco's brand new 2010 New Product Supplement is coming in March with over 180 new products. Tactical Bags, Vintage Canvas Bags, Booty Camp Shorts & Tops, Tons of Tees, Military and Public Safety Clothing, Tactical Gloves, Boots, Patches, Smith & Wesson Knives and Watches, Camping and Survival Accessories and so much more. Go to our website and click on 2010 New Arrivals to see the new items that are already here or Coming Soon for items that are coming this spring.

As always, Rothco is committed to helping independent retailers not only survive, but thrive in 2010 and the new products are a great start.

Here's to all the independent retailers out there and the millions of jobs you provide! You are the heartbeat of America.

John Ottaviano

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