There are many measures a company might take in response to business struggles. If the business has multiple locations, one option it might consider is shutting down one of its locations to try to become leaner.
One thing it can be important for a company to carefully consider when weighing this option is whether a closing would actually help it address the problems it is facing.
One industry that has seen a lot of location closings lately is the retail industry. A wide range of retail companies have been closing down some their stores in the face of the challenges the industry has been dealing with lately.
There have recently been some questions raised as to how much this trend of store closings will actually help the industry.
For example, one expert has expressed concerns that retailers may be turning to closings rather than trying to fix the underlying problems behind their challenges in competing. According to this expert, this could lead to companies over-closing and continuing to struggle.
Another thing it can be critical for a company to give close attention to when planning to shut down one of its locations are the various legal issues related to the closure. This can include things like employment matters, contract matters and potential disputes coming out of the closing. How these matters are handled can impact whether a business’ overall goals for the closure are met. When a business is considering closing a location or taking some other action in response to struggles it is facing, it can seek out guidance on the legal matters related to the planned action from a business lawyer.
Source: Business Insider, “Retailers are closing thousands of stores — but there could be a bigger problem hiding in the distance,” Hayley Peterson, April 13, 2017