Outperforming in a Recession (part 1): Off-price Retailers
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In a Nutshell
Introduction
The idea of these series of articles is to deep dive into business models that usually perform well in difficult business environments. Companies that can manage to successfully navigate under tough business climates while others are struggling to survive, or that at least are able to bridge over troubled waters with less volatility in their financial results.
This first article focuses on off-price retailers1 . In recessionary economic scenarios, customers increase their focus on value and this creates a positive business environment for off-price retailers. This situation, together with some idiosyncratic characteristics, makes these companies to usually outperform other retailers and to be able to emerge from these periods even stronger.
But just in order to start with a graphic idea about what happened in previous recessionary periods, let’s first have a look to the following charts:
