If you had deep pockets…

And, you wanted to move into a market it might be best to bet against the competition when the market is in a recession.

Why? Because if there are only a couple of local stores that you would be competing with they may not be able to whether the business down turn especially if competition comes into the area and takes some of the market share that has already gotten thin because of the business climate. Having deep pockets could allow you to operate at a loss until the market turns around. If the local stores can’t keep their doors open you end up with all the market in the end.

Lets take Ventura, a smaller town known for it’s surf. A local surf community and a destination spot for inland surfers. There are retail locations very close to the beach so everyone that comes into town as well as the locals can stop by the surf store and not have to go very far from the beach… in the case of Ventura only a block or two.

The big brand companies in surfing have deep pockets. Even though they have local stores that have been faithful retailers for them for years they can and do move into a market and in the case of Ventura could quite possibly squeeze enough market share so as to make the local long established stores struggle to remain open.

It seems that it’s pretty much only a numbers game to the big brands. They want to grow, open new stores based on numbers. I read a book last year about the corporate CEO and how they have changed from seeing their companies as people and families that are loyal workers and innovators that make the company what it is that not only make a profit for their share holders but gives value to the stock that the share holders have, to just a numbers game. There was a quote from a CEO of a multi billion dollar company that said ‘it was the companies moral obligation to make money for it’s share holders”.

Personally I think that’s mess up. As well, if the big brand surf companies move into areas like Ventura with little or no consideration for the local surf community other than what it will do to their own numbers... God help us.

D.R.