While Some Pull Back, Other Chains Expand

We started off the year writing articles on GlobeSt.com announcing plans by major retailers to either shut down or scale back their expansion plans. Ethan Allen is consolidating locations, Talbots is discontinuing its men’s and children’s chains and Pier 1 and Ruby Tuesday are holding off on new units. This doesn’t surprise us, given the current recession concerns.

But other retailers are doing the exact opposite. Urban Outfitters recently acquired a gardening business, and executives plan to ramp that up. American Eagle Outfitters is expanding its Aerie chain and is launching new concept called 77kids. Coach’s management announced today that they see the potential for 500 stores in North America, up from the 282 they currently operate.

So will we see more this coming year of either trend?

One would think that there could be some pull back if poor economic conditions continue. But at the same time, retailers are constantly looking for new ways to grow their business and find an untapped customer base.


1 Response to “While Some Pull Back, Other Chains Expand”

  1. 1 JStephenson January 28, 2008 at 3:17 pm

    Many industry sectors find periods of less than ideal economy, to be the very best time to launch expansions, undergo major renovations or upgrade the physical plant, buy property, etc.

    A depressed economy tends to lower costs. Land is cheaper, construction costs are cheaper, and labor costs typically aren’t increasing.

    Privately held companies, REITS or Private Equity Firms, etc., with a solid financial footing can take this opportunity to expand their holdings.

    Retail companies can follow the example of such powerhouses as the Semiconductor Industry, and plan for success. Plan now to meet future demand. When the market for your product is peaking, you’ll have the capacity to meet that demand.

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