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Expanding in a recession
When economies are going through a recession, people usually expect long unemployment lines, businesses that close down or reduce staff and a halt in new investments.
Yet, T&T has seen expansion in the retail and entertainment sectors over the last two years of the economic downturn.
The opening of the new franchise, international shoe and accessories brand, Aldo, two weeks ago at the C3 Centre, San Fernando, is another example of new business ventures in the middle of a slow economy in T&T.
Omar Hadeed, director, Sports and Games Group of companies, told the Business Guardian last week that he made the decision to introduce this brand to T&T even before the recession began.
“The process of acquiring the Aldo brand started over two years ago when, at that time, the economic activity overall was still relatively strong within T&T.
“Of course, there were concerns at the timing of this venture but I remained confident that the brand would revolutionise the market due to its incredible reach on an international stage and its extremely strong brand awareness.”
He pointed out he was not the only one opening new businesses and there had been an expansion from others in the local business community.
“There has definitely been a surge of new malls and retail outlets over the last couple of years but there have also been a number of reductions within the retail environment as it shifts to entertainment. I believe the market will adjust itself accordingly but the landscape is definitely changing.”
He said while the retail environment remains “fragile”, he believes that once the local business community remains innovative, offers competitive prices and offers good service, customers will prefer to buy locally rather than online on sites such as Amazon.
“Online shopping remains the largest concern to not only retailers but landlords alike. There has therefore been a conversion of retail space to entertainment with restaurants, cinemas, health and fitness locations and other services.”
He also spoke about challenges that he continues to face operating his businesses.
“The issue of foreign exchange is an issue felt by all. Regardless of the size of your business, the allocation that is received does not match demand. It is, therefore, all relative to requirements.
“Our company has decided to grow regardless of this difficult situation and to increase our market share within the retail landscape, but this expansion comes at a cost which means we have taken a closer look at some of the brands and stores within our portfolio to reduce purchasing in areas that do not provide a reasonable return.
“This action allows us to convert forex requirements from one sector to another to gain a more rewarding return on investment. At the end of the day, we must work within the limitations present to find more efficient ways of maximising our output.”
“Retail is not dead,” Hadeed insists.
“The consumer now has options and can now use separate channels to purchase at their favourite brand or retailer, and my job is to ensure they choose us, so you have to be all in.”
He also spoke about the international changes and evolution of the retail sector.
“In a retail environment where constant change has become the new normal, shoe companies have been forced to juggle a slew of disruptive forces at a frenetic pace.
“Volatile weather, the explosive growth of e-commerce and consumer shifts toward experiential spending are just some of the hurdles footwear and apparel firms are attempting to clear.”
He said long identified as a mall store, footwear and accessory retailer, Aldo is changing that tune with a “new sense of hope” for many retailers, as they begin to unveil strategies — including beefed-up in-store experiences and social media initiatives — aimed at overcoming these difficulties and spurring growth as it prepares for international expansion.
“The retail industry is evolving and transforming faster than any other trade in the world.
“No longer responsible for simply owning the brand and delivering creativity in the business, today’s retail industry has a vast and complex set of responsibilities that span technology, analytics, growth and most of all, delivering measurable impact.”
He described the opening two weeks ago as “overwhelming.”
“In just five days the store achieved its monthly budget. The reception was truly unbelievable. Customers were apprehensive before the opening about our prices. On social media they questioned whether it would be the same as international stores.”
He said just as with their other brands, they continued the trend of offering customers the very same pricing and variety as they would find in any other Aldo store worldwide.
“The customer satisfaction was felt through the incredible sales experienced during the first weeks of opening which broke many international records.
“Aldo has over 4,000 stores in more than 78 countries worldwide.”