Company resilience in the retail sector

Following a recent round table organised by The BusinessDesk.com in partnership with Shoosmiths Sarah Teal, a partner at the firm, addresses the issue of resilience

A company’s ability to rapidly adjust and respond to business disruptions and protect jobs and assets whilst maintaining usual business operations is an important part of the current business landscape, particularly within the retail sector.

A report issued by CBRE states that a culmination of factors including the rise of ecommerce, employment rates and the EU referendum have  resulted in a number of well-known high street names deciding to either restructure their business or cease trading altogether.

To prepare a business for unexpected problems, it is important to look at a number of factors, from cultivating a strong team of board members, to diversifying your suppliers. At Shoosmiths, we have seen a particular increase in demand for board advisory work, and we would always recommend companies have in place good corporate governance at board level.

Good corporate governance means ensuring that your board members are not only collectively responsible for the wellbeing of the business, but also that each member presents a fair, balanced and understandable assessment of the company’s position and prospects. Transparency at this high level can protect businesses to a certain degree from unexpected trouble by strengthening the benefits to all stakeholders, including suppliers, employees and the wider affected community.

Other important ways to build resilience for your business include financial risk assessments and strengthening accounts to anticipate cyclical and temporary shock factors. Declining footfall on Britain’s high streets and apprehension surrounding Britain’s exit from the EU have certainly been factors for companies to consider, especially with the rise in ecommerce, however there are still many consumers who enjoy the immediacy of in-store shopping, so striking a balance appears to be key.

Companies should also be considering broadening their suppliers, especially to ensure business growth. Often a single-sourcing method of supply is advantageous to SME’s because it promotes good working relationships and less administrative effort. However, as we have seen in China, during periods of tight-supply it could be difficult for companies to source through other channels for a competitive price if they have not prepared for this in their accounting and strategy planning.

Finally, employers must have strong and fair contracts in place for their employees and their trading partners. Recognising that people play a key role in any business, and making sure that employees and partners feel secure will help strengthen your overall offering during the periods of change we have seen in recent years.

Overall, ensuring longevity for your business is something companies need to be planning for, and seeking proper legal advice at the beginning of any turbulence will help smooth areas of restructuring, or in extreme cases, ceasing trading.”