Therefore, the development and prosperity of the retail industry is a leading indicator of the United States’ economy. There are eight segments in the retail industry, which are apparel, catalog and mall order, department and discount, drugs, grocery, home Improvement, specialty, and technology. Because of the big impact of the recession starting from 2008, all the stores in the segment of department and discount, which is where Spinney is placed in the retail industry, had a combined annual revenue of merely $198 billion in last year.
In addition, the growth rate of that as remained negative through out the past four years and is expected to continue to be negative In 2013. Company Overview Spinney Company, Inc. Is a chain of American mid-range department stores based in Plano, Texas. The company operates 1,107 department stores in all 50 U. S. States and Puerco Rich. In addition to selling conventional merchandise,Spinney stores often house several leased departments such as Seaport, Cattle’s Best Coffee, optical centers, portrait studios, and Jewelry repair. SOOT Analysis I Strengths I Weaknesses I 1. Balanced Brand Portfolio 2. Wide product offerings 3.
Multiple retail Channel I 1. Tremendous decline in store sales 2. Difficulties in expansion of oversea market I Opportunities I Threats I 1. Expanding physical Seaport stores 2. Investment in online store | 1. Growing counterfeit goods markets 2. Swift in fashion trends and pricing pressure 3. Weak performance In PAYOFF 1 Because of the development of technology and the change AT customers’ preference, nowadays large department stores Like Spinney not only compete with their rivals in their own industry, but also face the new challenge from Internet based retailer such as Amazon and other forms of e-commerce.
In order to fight against these competitions, the company began shifting its business model from a promotional department store to a specialty department store in 2012. That resulted in a federal net operating loss (MOL) of approximately $1. 5 billion. Even though the company has now welcomed back its previous CEO and introduced back its old promotional strategy, there is still not a clear vision of company’s strong coming back. SOOT Analysis The following table shows details about the Strengths, Weaknesses, Opportunities and Threats (SOOT) analysis, followed by specific explanations. Table 1 SOOT Analysis
Strengths: One of the main strengths of Spinney Company is its wide range of products. Spinney offers various products, including clothing, footwear, furniture, jewelry, beauty products, electronics and housewives. Also, Spinney sells its products through multiple retail channels, such as physical retail stores and website. What is more, Spinney successes in building a portfolio of best global brands in retail. Weaknesses: Spinney is now suffering from strong decline in comparable store sales. As the Spinney financial report shows, it has the worst store sales in its retail history in SQ 2012.
Besides the popularity of store, Spinney is also difficult to expand into oversea markets as the domestic markets may be saturated. Spinney has over 1,100 stores in the U. S but seldom in other countries. Opportunities: Though Spinney lost store sales in recent years, Spinney still has large customer base. Seaport makes large amount of money for Spinney so that Spinney is recommended to expand physical Seaport stores in the U. S and also all over the world. Despite of the declining popularity of in-shop stores, Spinney can still invest more in online stores, enlarging this kind of retail channel.
Threats: The threat of Spinney is that growing counterfeit goods market may keep customers away from going to J. C. Penny. Plus, due to fast swift of fashion trends and also pricing pressure, Spinney may lose its pace with the market. Finally, Spinney still needs to deal with the weak financial projection for PAYOFF. Historical Analysis As one of the major retailers in the United States, Spinney has 1,104 department stores in 49 states and Puerco Rich as of February 2, 2013. The key success of its business is tremendously depending on the sales performance.