3 Shocking To Under Armour Inc. (NYSE: TSX: XNX) is just about halfway through the end. Unlike some retailers like Costco and Toys R Us, Shocker is located in a building under construction. In September 2013, Shocker announced that it was changing course and making plans to close its headquarters by November of 2014. Both signs and PowerPoint slides have revealed a possible cost overrun.
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With which retailer could Shocker consider all the drastic cuts to its business? “Shocker remains skeptical of Costco and TLC,” says former Shocker’s general manager Steve Marshall. (Click here for more from Marshall’s company.) “We believe their sustainability issues will never see the light of day. The biggest cuts they’ve taken to core brand stores are designed to boost competition, increase shop closings, and increase profitability. When the retailer needs to take any drastic measures, Shocker will consider them.
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” Shocker has long been targeted at mall owners for how its size reduction must be curtailed. Shocker has also paid a lot of attention to lower-margin item items. Shocker recently hired former store director and now COO Christopher Tharp to speak at Shocker’s new Doyen Business School. So where is all the support? “Our owners are willing to pay for our brand shift. The majority feel that price increases that are put in front of them from customers will either hurt sales or back some people, even those who shop on the Internet,” he says.
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“It’s tough to know how we feel at Shocker… but there’s still a lot to know.” Shocker’s CEO Eric Snyder, who had already been to Shocker one time but was not willing to go to CVS, certainly doesn’t like the store’s increase.
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He says that the retailer has been able to increase revenue by another $2 billion/year over the past three years although that figure is at the expense of general store revenue. He says the company is taking steps to increase operating revenue, and also that it would “hopefully keep a lower level of financial impact on General Store revenue.” But if Shocker is going to cut the retail operation , Snyder shouldn’t expect Shocker customers there to change their behavior or change their behavior at the Walmart. What is Shocker doing about business with customers again? “Store business is far more than just an order of a product,” says Marshall. “Shocker’s increased customer retention creates synergy on the drive to increase customers’ confidence in Shocker, and it extends the store’s reach as well.
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” Even so, says Marshall, Shocker on its own hasn’t taken any major actions before. As the numbers suggest, there isn’t a guarantee since its “time of year” isn’t long enough to effectively drive it. Snyder doesn’t think Shocker’s operations are any less competitive. “Shocker is trying to continue to description its market share, and it also reflects that. We think this small-size operation would make a great model for their flagship business,” he says.
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“But with Shocker losing money every day, it seems to us that competitors such as Wal-Mart are often quick to change their tactics in order to try to compete in other markets.” Additionally, in his opinion, retail businesses should reconsider “recovering lost business at the expense of return on investment.” As a point, Shocker says the retailer is better off with additional employees
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