Chapter 702
Jeanne returned to her office, with Amy following closely behind.
Forrest was also called in.
Since Jeanne was promoted to the position of Lawrence Enterprise’s executive general manager, the people in her project team also got a promotion.
“What’s the deal with Lawrence Electrical’s retail agents?” Jeanne asked.
Forrest quickly answered, “Lawrence Electrical has a general retail agent in every region and is distributed in various stores across all parts of the country through them. Each place has its own direct-sale store under Lawrence Enterprise’s management and stores under the retail agents. 20 years ago, when Lawrence Electrical was at its peak, the retail agents had stores almost all across the country and in overseas countries. However, with the outdated sales of Lawrence Electrical, foreign electrical appliance brands gradually moved into Harken ten years ago, and the sales volume of Lawrence Electrical decreased significantly every year. Up until now, Lawrence Enterprise’s physical stores have downsized by two-thirds compared to when it was at its peak. We have also analyzed the remaining one-third. The turnover is not high, and most of the stores are barely keeping up p>
Jeanne was deep in thought as she listened to Forrest’s report.
“Now that the house prices are getting increasing, the rents of the shops are also rising. I have analyzed a few of the retail agent stores that used to do well, and their annual net income doesn’t exceed 50 thousand dollars. However, 20 years ago, their income exceeded 100 thousand dollars. With inflation going on, their income did not increase but instead was reduced by half. From a fair and just point of view, we are indeed in the wrong when it comes to the business of these retail stores p>
Jeanne nodded, “Back when I was overseas, their development of the internet was ahead of Harken for many years, so the real economy took up a very small proportion of the national economy. Hence, the people didn’t depend much on the real economy. I had almost never considered the marketing of physical stores when I was at MUK Group, so when I returned to Lawrence Enterprise this time, I never thought I would have to develop or support the sales of physical stores p>
“According to the current development of Lawrence Enterprise’s e-commerce business, I’ve done a rough analysis of it. If we were to reduce half of our current physical stores, it wouldn’t have much of an impact on our sales. But now, our reputation has been greatly affected. I’ve also done some investigating. Back then, because the internet wasn’t developed, Lawrence Enterprise’s success was actually due to the owners of these physical stores and the agents who kicked up a fuss just now. Apparently, it was your mother, Penelope, who opened the chain of Lawrence Enterprise physical stores. That was how Lawrence Enterprise become one of Harken’s top enterprises at that time and saved the so-called economic development of the twelve families back then p>
Jeanne’s eyes moved slightly.
In that case, it meant that those people worked for her mother back then.
Every era had its own way of developing.
In the past, when Internet technology was not yet developed, one had to open chain stores and constantly recruit retail agents if one wanted to hold market share. Moreover, the investment in physical stores was greater than in the Internet in the first place, hence attracting investment and business opportunities was the best way to grow the company. Moreover, Lawrence Enterprise did not have much money back then. If it were not for the retail agents sharing some of the costs, Lawrence Enterprise would not have developed so smoothly. Moreover, at that time, Lawrence Enterprise had an advertising slogan that said, “80 percent of the household appliances are from the Lawrence Enterprise p>
One could imagine how high Lawrence Enterprise’s market share was back then.
Her mother had developed Lawrence Enterprise to its peak, only to end up being framed by someone.
Jeanne pursed her lips.
Some things were easy to get into a dead end if one thought too much about them.
She went straight to the point. “What is the biggest struggle in the real economy right now p>
“Firstly, there are too few people. Currently, the rate of people entering the physical or retail store business is very low. It is about 30 percent of the original rate. Moreover, most of them are middle-aged and over 50 years old, and the sales volume is mostly for low-end products. Secondly, the rent is too high. President Lawrence, you should know how crazy the rent prices in South Hampton City have been in recent years. I have seen many reasons for the closures before, and 80 percent of them wrote it’s because rent is too high to be affordable. Thirdly, the profit is too low. Physical stores sell at slightly higher prices than our online products because of human labor, rent, and other reasons. However, in recent years, because most people choose to shop online, retail agents have had to lower the prices to keep up with the online prices, which naturally reduces their profit. Some stores even make discounts on top of our online prices to attract people to buy from them. Then, they’ll use their revenue to cover the cost p>