Big stores doing it tough

Big stores doing it tough

There has been a recent spate of store closures and mergers in the worldwide retail industry which has been attributed in part to a shortage of quality IT initiatives and the increase of online trading. The closing years of the millennium are proving to be tough times for some big retail players.

J.C. Penney closed 75 stores in January and last week announced a new merchandising strategy to improve its weak sales. Last month, retailing giant Service Merchandise said it would close more than 130 stores while in December, Ames Department Stores took over Hills Stores and at about the same time Caldor Corporation announced plans to close its doors for good.

Industry watchers are predicting more outsourcing of IT operations and more mergers driven by a need to shore up technology weaknesses, which many retailers can't afford to fix on their own. In retail, the chief functions of IT are to manage your inventory better, identify your best customers and sell on the Web.

The problem is that retail IT departments often lack personnel with the skills necessary to handle those tasks, it has been said. They can't compete for quality staff against the huge salaries being offered by banking and high-tech companies.

Meanwhile, their year 2000 projects are more daunting than most because they have complicated supply chains that include lots of foreign suppliers.

Add to that the fact many have the added work of developing a competitive Web site on which to sell their wares.

A recent study of 300 retail executives done by Computer Sciences Corporation showed that 80 per cent of department stores plan to implement online shopping in the next two years.

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