Sorry To Be a Pessimist, But It's a Real Recession

I've often been accused of being a pessimist by people who didn't like what I was saying, even when I turned out to be right. But you know, sometimes they were right. I was too pessimistic. So I've tried not to be. And that extended to the article I wrote for Transworld Business that showed up in the trade show issue called Subprime, Teen Spending and the Economy, where I tried to be balanced to positive in evaluating economic conditions and how they might impact the snow/skate/surf industry.

But here in my blog, I can write anything I damn well please. Having watched certain economic conditions deteriorate even further in the last few months, I want to tell you that we are almost certainly in a recession (though it's never official except in hindsight) and that we will not be immune to it. If we were more or less immune to the last two, it's because they barely qualified as recessions. This is a real one lead by a decline in consumer spending, or at least consumer spending that's shifted to food and energy. Go take a look at the number of retail bankruptcies and the closing of stores by big chains.

We're in the worst financial crisis since the depression (that's not only my opinion). Today I read that people who have other than excellent credit are having trouble getting car loans. People are going to have to "settle" for less car than they want. What an inconvenience- having to buy a car you can afford. Hardly seems fair. America is in the midst of deleveraging. Good. We need to. Or at least it was inevitable that it happen.

The good news? Generally, large companies across the board are in pretty good shape. Inventories are under control, debt levels are low, and a weak dollar (don't look for that to change) is making our exports more competitive.

Can we hope not to be hit as badly as other parts of the economy? Hope, yes. Skateboard hard goods especially I would expect to be somewhat recession proof. But we are being impacted. Right now.

Hope springs eternal, but I hope that hoping isn't keeping you from doing what you know you need to do. You know- all the usual stuff; manages expenses, control inventory, pay down debt, build your balance sheet.

Oh, and one more thing. Those of you who are strong brands, and I include quality retailers as brands, are going to find opportunities here as others who haven't done quite so focused and consistent a job running their businesses over the years get into big trouble. So don't let me being a pessimist or your being correctly cautious in how you run your business make you lose the chance to try some new things. Use the uncertainty to your advantage!