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Dramatic retail market consolidation ahead

Three-quarters of senior business executives expect dramatic consolidation in the retail market this year, as strong retailers use the recession as an opportunity to acquire weaker businesses.

According to research from consultancy The Gap Partnership, which draws on forecasts from 40 senior business executives from retail and other consumer businesses, the fashion sector will be hardest hit by consolidation.

Steve Gates, founder of The Gap Partnership, said: “As the recession bites, the retail market is struggling to stay afloat. We have already begun to see the fashion segment tighten its belt, with retail magnate Sir Philip Green planning to merge the head office functions of Bhs into the Arcadia Group in an effort to reduce costs.”

He added: “As the economy continues to tighten, growth plans will evolve into buy-outs and mergers. Today’s economic conditions mean that the next few years will be a time of challenge, but also of potential opportunity. In a turbulent market characterised by change, negotiation is critical.”

“When facing market consolidation companies must be proactive. In order to ride the waves of consolidation, a company must define its end game, and develop a clear negotiation strategy to achieve its goals.”

The research was published as part of a larger report Negotiating in a Consolidating Market. For more information go to http://www.thegappartnership.com/Workshops.aspx

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