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Strikes Back
Recession Takes Down Another Retailer: Diamonds & Pearls
The credit crunch is like a hurricane rolling through town: merciless and brutal, sweeping up and destroying anything that's not properly secured. In the UK we've seen the demise of Woolworths and MFI in recent months. Now its the turn for diamond and pearl jewellery retailer Diamonds & Pearls. The Bedford-based company announced recently that they have gone into administration. Over three hundred jobs could be lost, with 91 high street stores across the UK under threat of closure.Global accountancy and management consultancy firm KPMG have been named as administrators. The administrators named by KPMG's restructuring department, Myles Halley and Richard Philpott, said that they intend to sell the business by the end of the year and are currently seeking a buyer.It was clear from their statement that this is going to lead to branch closures, and, in their words, "a number of redundancies".
Down goes another victim of the Crunch in 2009. However until very recently Diamonds & Pearls claimed they were "one of the UK's fastest growing fashion retailers". So what exactly went wrong? So is it bound to happen that the smaller and medium sized retail businesses will suffer collapse during the financial crisis? Far from it. While Diamonds & Pearls' physical stores may have been doing well in recent years, a quick look at their website, http://www.diamondspearls.co.uk - and you'll quickly see the problem. Aside from being a pretty poorly designed site, when you click on "Online Shop" you get the message "Our Online Shop is currently under development, Please call back soon"! How about that! Mystery over, as far as I'm concerned. There's no doubt in my mind that Diamond & Pearls suffered because they completely failed to complement their stores with a web presence. The internet has been the saviour of businesses during the credit crunch, with increasing millions of consumers going online to find the best deals. It's especially fundamental for small to medium retailers to take care of this. If you're not in that sphere and holding your own, and trying to run your business purely on retail outlets alone, you're almost guaranteed to fail. That was a big factor of the downfall of even the big guys like MFI, Woolworths and very recently Principles. These companies had one thing in common: they categorically failed to really capitalise on the online retail revolution that has been going on for the past decade. If I was looking for information on saltwater pearls, or browsing for freshwater pearl jewellery for a Mother's Day gift, the first thing I'd do is search for those things. The same as hundreds of thousands of internet shoppers would also do - and they wouldnt have found Diamonds & Pearls this way
. Retailers beware: this is the clearest example you'll get, and if you fail to heed this advice you could be next.
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