Even as states begin to lift lockdowns, COVID-19’s economic effects are widely expected to stretch into the second quarter, if not beyond. Contributing editor Anna Robaton spoke with thought leaders from different corners of the industry about what they learned from recessions of the past. Our series continues with ...

Kranzdorf says:

Cash is king, and relationships matter now more than ever

To survive a recession, it’s important to build up a cash reserve. In good times and bad, you should also try to build a strong relationship with lenders, retailers and suppliers. When times are tough, for instance, you don't want to default on loans, if you can help it. Before I took my former company, Kranzco, public in 1992, I bought 16 centers out of bankruptcy court and got major lenders who were owed on the mortgages for those properties to call the judge to say that I would pay off the loans. They were willing to vouch for me because I’ve worked hard to protect my reputation and treat people fairly. In the early years of my career, I was sometimes criticized for leaving a nickel on the table. I didn’t bargain down to the last nickel when doing deals. It’s important to keep in mind that both sides have to make a living.

Prices will soften, bringing consumers back to stores

Americans have been conditioned to be buyers. We are a consumption-oriented society. Consumers will eventually come back to the stores. You will rent your stores. You may make a little less money over the next several years, but we’ll eventually have price deflation and that, in turn, will get consumers back into stores in greater numbers.

Check out the rest of our Recession lessons series

Part 1: Daniel Hurwitz
Part 3: Valerie Richardson
Part 4: Yaromir Steiner
Part 5: Dana Telsey
Part 6: David Zoba