Retailer: Bleak Christmas ahead

The global economic turmoil is sending signals that this year’s Christmas season could be the “worst holiday, economically, in decades," with possible lay-offs threatening employees in the retail sector.

Golden ABC Inc. chief executive Bernie Liu considers Human Resource rationalization as one of the primary shields in fighting for survival, if other cost cutting measures won't be enough.

"One of the biggest, most flexible and emotional places to cut is 'personnel'. A company shouldn't think about who its laying off, but rather whose jobs is it saving by doing what it has to do to stay in the business," said Liu speaking before Cebuano retailers during the 2nd Philippine Retailers Association-Cebu general membership meeting, Wednesday.

"With inflation rates already shooting up to double digits, consumer spending will be controlled, if not radically changed, with [consumers] choosing to stick to essentials," said Liu, whose company owns nationally and globally acclaimed apparel brands like Penshoppe, Oxygen, Memo and For Me.

"We might see it in our shelves with inventories hardly moving as we planned. It will show in our income statement and balance sheets," he said.

Cutting off a job for one employee for instance, might be heartless, but if business could continue as normal, eliminating a certain job assignment, this can actually mark an upside of the economic downturn.

"There are probably employees that companies should have separated for performance issues, but didn't want to make those hard decisions when times were good," he said.

Liu, a seasoned Cebuano retailer, said retail companies may be forced to cut overhead costs, suspend expansion and renovation plans and shrink inventories in order to get through 2008, and fight head on to the more threatening challenges next year.

On the other side of the fence though, he said these trying times, should not be a reason for retailers to be fearful and eventually paralyze the business, rather use fear to spur into action.

"Use your fear to heighten your senses. Use this fear to innovate," Liu said mentioning that when Penshoppe started its business in 1986, it went through several economic unrests, including political troubles in the Philippines, but it has survived through, and now starting to penetrate the international shores with outlets in China, and other countries.

"Golden ABC seems to have a penchant for crises. We launched Penshoppe during the 1986 People Power EDSA Revolution. We opened our first Metro Manila boutique in 1991 a day after Mt. Pinatubo erupted. We invested in our Enterprise Resource Planning [via SAP] at the height of the Asian financial crisis. We opened new brands and expanded in the midst of political unrest and economically challenging times," he related.

Thus, amid the dangerous moment, retailers should keep in mind that "there is opportunity."