From Home Furnishing Business
What Does The Barometer Say?
The financial results for 2022 for the top quartile retailers was a welcome relief. The unprecedented financial performance that started in the last quarters of the pandemic year and continued for the next eight quarters have replenished many retailers’ balance sheets. Several profitable retailers with no family succession strategy have not taken the risk and decided to “take the money and run.”
For those that remain, another management challenge is on the horizon. Many traditional furniture retailers learned to manage in an environment of supply chain problems and rapidly increasing prices. The result was a significant financial return. Now it is another set of management disciplines on the financial side. The starting point is financials on your desk by the second week after the close of the month. And yes, expect a cash flow from your financial team – not from your CPA. The following graph illustrates the cash flow factor for top quartile retailers. What is your cushion?
Fasten your seatbelts. It’s going to be an exciting ride. Understand your expenses and the impact on cash flow. Question every decision as to impact on cash flow.