Page 64 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 4: Store Opening and Closing

Make Sure you’re covered from a Legal Sense Notes

In some circumstances, you’ll need to make sure you’re legally permitted to close a store.
Franchises, for example, must satisfy certain legal requirements, or you may be obligated to
continue paying for a lease on a store that has closed months ago. Examine all contracts you’ve
signed relative to your store, and make sure you’re covered from a legal sense. If you’re not
sure, consult a lawyer, or hire a consultant who specializes in closing a business. The legal
repercussions can be bleak, so it’s vital to proceed properly instead of closing first and dealing
with the legal questions later.

Know Your Financial Liabilities

You don’t want to close a business and owe your creditors money, so make sure you know your
financial liabilities before you close. Find out exactly what you owe to whom, so you know
what you need to make in order to close your store in the black. If your existing inventory isn’t
enough to cover your financial liabilities, consider a consultant to advise you on the best way to
proceed. You may also want to contact your creditors to negotiate a partial payment if closing
the business won’t pay them off completely.

Schedule an Inventory Liquidation Sale

You don’t want to close a retail store with inventory still on the shelves, as you’re liable for that
inventory, and keeping it around is a waste of money. Schedule a closing sale to liquidate your
inventory. Make sure you’ve got a full, attractive inventory; old or out-of-date inventory sells
poorly, so you might have to spend money to make money. You’ll need to cut prices, but don’t
cut prices too low too early, or you won’t have any room to cut them further.

Advertise the Heck Out of Your Retail Store Closing

An inventory liquidation sale is useless if people don’t know about it. Advertise, advertise, and
advertise to make sure people know about your sale. Put signs on the street. Buy television time
if you can afford it and your inventory is warranted. Add news about the liquidation sale to your
Web site. E-mail your customer list. Utilize any existing advertising channels to notify customers,
and get the word out about your closing sale.

Consider Your Equipment

If you’re closing a business and don’t intend to re-use the equipment, don’t forget to sell it. You
might be able to sell shelving or displays at a liquidation sale, or you may need to contact a
company that deals in store equipment. If you know of another store that’s opening, you may be
able to sell your equipment to the new store and get a decent deal. Otherwise, plan to sell your
equipment to the highest bidder, and realize that you’ll likely take a loss on selling it.

4.1.3 Essentials of Store Closing

Following are the essentials of store closing:

At closing time, one employee will lock the customer entry door(s) from inside.
An employee will be stationed at the front door to let any customers remaining in the
facility out one at a time.

Employees should take special notice of any customers that seem to be loitering or
intentionally trying to be last in line.

LOVELY PROFESSIONAL UNIVERSITY 59