Nobody Knows Retailers When They’re Down and Out
It has occurred to me over time while reading posts on RetailWire that successful retailers that go on losing streaks (Best Buy, J.C. Penney, Kmart, RadioShack, Sears, et al) have a lot in common with the lyrics in Jimmy Cox’s blues classic "Nobody Knows You When You’re Down and Out."
In my favorite version of the song, performed by Derek and the Dominos, Eric Clapton sings about living "the life of a millionaire" only to find himself without a penny "and friends I haven’t any."
It seems that some retailers get into a place in which every piece of "bad news" reinforces the perception of a company in trouble. Consumers are naturally attracted to winning businesses. They’re only attracted to losers when it comes time for liquidation sales.
So I find myself questioning whether large layoffs, which Wall Street might welcome, actually work in some respects against turnaround efforts. Cases in point are Best Buy and J.C. Penney.
Best Buy, which has seemed almost more like a soap opera than a business since Brad Anderson stepped down as CEO in 2009, announced it will cut 400 jobs at its headquarters.
And how does a consumer seeing all the Penney commercials during the Academy Awards telecast square that with news the chain has just laid off another 300 workers at its headquarters in Plano, TX?
We all know that tough decisions have to be made at times to get a business headed in the right, profitable direction. What I can’t help but wonder is if there is a time limit on bad news. How long before consumers lock-in a negative image of a retailer that becomes impossible to reverse?
- Nobody Knows You When You’re Down and Out – International Lyrics Playground
- JCPenney Cutting 300 Workers at Headquarters – New York Post
- Best Buy says it will cut 400 jobs at Richfield headquarters – Star Tribune
How much bad news can a retail business take before consumers tune out the positive? Are there retailers today that have a bigger problem with consumer perceptions than might be warranted by their financial results?