I hope you never need the advice in today’s blog, but the fact is that many shops (like the Northern Music & Video store in Potsdam, NY shown in the illustration above) do eventually close.  Sonia Mott, who was a fellow retail advisor to the Gift and Home Trade Association, has gone out of business not once, but twice.  

She had shared her experiences from the first time her award-winning home accessories store Motif closed in the 3rd edition of my book, Specialty Shop Retailing.  She has even more insights to share in the 4th edition, which (if all goes well) is being delivered to the publisher today.  I wasn’t able to fit all of Sonia’s good advice in the final chapter of the book, so I thought I would share it with you in today’s blog. 

“I found out during the second round of closing how much I didn’t know as far as additional steps I should have taken the first time around,” Sonia wrote. “These additional actions only make sense if you want the closing to be as profitable as possible. The more profit, the more time and hard work goes into it. Here is what I would recommend if you want to walk away with the maximum amount of money after the sale is over:

• Keep the closing as confidential as you can.  That includes employees, which will not be easy but is necessary.  They should be told about a week out from the first day of the closing.  You’ll need their help.  And you should be prepared to offer “staying on bonuses.”  But customers can’t know anything until a few days before.  Research shows Tuesdays are the best day to start the sale.

• Buy, Buy, Buy – BUT OFF PRICE!!!!  All merchandise should have at least a 6 time markup, because you’ll be offering it at a discount off that retail price.  This is not easy and takes time.  Call every contact you have BUT do not let on that these purchases are for a closing sale.  I was lucky because at the time of our second closing, many of our showrooms in Chicago were closing.  I went and bought out several of them.  I also researched small shops closing and did the same thing, bought them out.  I did have to dip into savings, but it all worked out.  Also, find that person who runs the warehouses of your vendors.  They know what’s been sitting there taking up valuable space and what products are overstocked.  Take as much as you can.

• Signage is huge.  Before you go out and spend money on big outside banners and signs, check with your municipality, because they all have rules and regulations.  Know them before anything is put into motion.   For signs used inside the store, black on yellow still is the best.  I know it’s hard but it does work.  Make sure all of those signs with different percentages are made up ahead of time.  You don’t want to be messing with them on a daily basis.  

• Most of us have more emails than street addresses.  Which ever is the best list, the message needs to be as personal as possible, not an advertisement.  Let them know they are receiving a one or two day heads up because they are considered VIP’s.  If sending letters, have them in the mail Friday or Saturday before that Tuesday.  Have publication ads ready to go on Wednesday or Thursday.  If using emails, send them out Monday around 7a.m.”

I appreciate Sonia’s generosity in sharing her hard-earned wisdom, and hope that if you ever have to close your store, this helps you walk away with more money in your pocket.  You might need the funds if you decide to give shopkeeping another try…

Happy Retailing,

Carol “Orange” Schroeder