Essay Example: Closing Down Some Stores by Post Corporation

Post Corporation has recorded significant amounts of debt over the past business periods. The money has accrued due to the heavy borrowing to finance various business activities. The amount of debt and the current slow business environment are making it difficult for Post Corporation to keep operating in the current setup. Standard business processes will not help the organization to pay off the debt and remain afloat.

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Online Business

Buyers have adopted new purchase habits that are inspired by developments in other sectors. The rapid advance of communication technology has led to the proliferation of digital devices like computers, tablets, and smartphones among others. These developments, coupled with high internet broadband, have shifted the priorities of most customers to the online space. The convenience of online shopping is reducing the foot traffic to most physical outlets (Gustafson, 2015). The rise of Amazon, for example, has been a key gamechanger for retailers worldwide as most customers are gravitating to this platform. Closing down the stores will help Post Corporation to reduce its financial burden since they are no longer self-sufficient.

Debt

Post Corporation owes a high amount of debt and hence all the available funds are used to this effect. Competing in the current landscape is quite challenging since the company cannot set aside money for revamping the stores or investing in the websites for e-commerce (Segarra, 2018). The lack of free cash means that it is becoming increasingly difficult to compete with other firms that are investing heavily to improve their services. It will not be possible to stock up these store locations and offer a worthwhile experience to the customers, and hence it is best to close up the stores. The expenses of running them are also adding to the massive debt, exacerbating the situation.

It is critical to close down the stores and go back to the drawing board to consider the next move. The open stores are not drawing in enough customers to meet their targets, and they will continue to increase the debt burden. Shutting stores should not sound like a death knell for the company, but an opportunity to restructure operations (Craig & Raman, 2015).

References

Craig, N., & Raman, A. (2015). Shutting Down Stores Doesn't Have to Be Bad for Business. Harvard Business Review. Retrieved 6 April 2018, from https://hbr.org/2015/06/shutting-down-stores-doesnt-have-to-be-bad-for-business

Gustafson, K. (2015). Retailers are closing up shop. Here's why. CNBC. Retrieved 6 April 2018, from https://www.cnbc.com/2015/01/09/retailers-are-closing-up-shop-here's-why.html

Segarra, M. (2018). Toys R Us and why the retail downturn is all about debt. Marketplace.org. Retrieved 6 April 2018, from https://www.marketplace.org/2018/03/06/business/toys-r-us-and-how-retail-downturn-story-about-debt