Lessons from BBBY bankruptcy
1. It is hard to turnaround a business
Once a business starts to spiral, it takes a lot of money and work to turn it around.
2. Giving customers too many coupons is not good
Giving too many coupons to customers creates a difficult culture.
3. If you do retail you must sell essential products that get customers in the door
Every business needs recurring customers and not just one off.
4. Debt will catch up with you
Interest adds up.
5. Building a brand is hard
It takes a long time to create a well known brand, but minutes to destroy it. BBBY is just a store name, there was nothing significant behind the name.
6. More infrastructure means more costs
Real estate and workforce gets more and more expensive the larger the retailer gets
7. When a company offers a second or third stock offering it is not a good sign
When a business has to repeated ask for money from the public, it makes the existing shareholders unhappy and they may decide to sell.
8. Bigger online store
Open up to 3rd party sellers and retail comes second.
Every online retailer should be working to become the next Amazon. A walled garden of curates products from your own list of vendors is not going to work in the future.
9. Higher interest rates hurt retailers
Rising interest rates means debt becomes more expensive. And less customers may shop in your store if the items are more expensive.
10. Medium size stocks are risky
They can be bought out or a bigger fish can drive them out of business.