Distribution/Retail

Federman, Lally & Remis has a large and diverse practice in the retail and distribution industry. We think of these enterprises together because retail and distribution have many commonalities. Many retail businesses have a large distribution function. Of course, even pure distribution businesses have a sales and marketing component. Sometimes you have to step back and look at the overall enterprise to see the common elements.

Distribution enterprises have industry themes. They have special requirements. These are typified by clusters of issues: shipping and transportation; human resources, staffing and turnover; internal accounting; reporting to multiple users; inventory; and facilities. In a world that generally thinks of inventory and receivable turns in weeks or months, this industry looks at days and weeks. In addition, distribution companies are financial intermediaries, their credit and banking relationships set the size and scope of their activities and growth.

Retail shares many of the distribution issues and adds a public face with sales and marketing dimensions. Inventories and receivables and their accounting issues become key elements of the financial statements. Obsolesence and seasonality are added factors in inventory considerations. Once again, the strength of the balance sheet may dictate banking and credit decisions which impact growth and access to capital. While manufacturers may eventually reach a point where banking and credit are secondary issues, this is virtually never the case in distribution and retail. For these businesses, the financial statements are key components of the overall picture.