Hughes:2026: From Crisis Response to Strategic Opportunity

When the camera turned from 2025 to 2026, you could hear a metaphoric and collective exhale from the entire industry. Now that the new year is here, does it mean that everything that made for such an unusual year magically goes away and gets relegated to remain in 2025 forever and never to be seen or heard from again? Of course not. So how do people, companies, and an entire industry prepare for what 2026 holds?

Tariffs, global economic uncertainty, and unprecedented supplier turmoil do not have to spell disaster for distributors throughout the aftermarket. Proper preparation, analysis, and the willingness to remain agile and make strategic steps can turn the challenges of 2025 into opportunities for 2026.

Liberation Day and Its Aftermath

President Donald Trump proclaimed that April 2, 2025, was to be known as Liberation Day—the day he rolled out a sweeping package of duties and tariffs to countries around the world. Nothing like that had been done since the early 1930s, and historians told us those tariffs exacerbated the effects of the Great Depression.

Someone forgot to tell the historians that we were in uncharted economic territory, and a lot had changed since the Great Depression—including a total reshaping of Europe and the global economy based on the outcome of World War II. Opinions still vary on the state and health of the economy, but a new depression did not happen before the end of 2025. Some say it still is on the horizon, while others say we are pointing toward strong and steady domestic growth.

The reality for the aftermarket is that 2025 was not easy, and it was never going to be easy. But Liberation Day injected uncertainty into the supply chain. By year's end, countless hours were spent in meeting rooms with company leaders and professionals representing supply chain, procurement, manufacturing, and every other business discipline within an organization, trying to evaluate the impact of new tariffs.

The aftermarket was not the only industry facing this turmoil, but by year's end, optimism for 2026 began to pick up.

The Lesson in Agility

In total, 2025 was a year where the entire industry learned how to remain agile, stay as lean as possible, and diversify the inputs going into whatever product or service you are offering. Old sayings like "Don't put all your eggs in one basket" saw renewed use. Not knowing when or where new tariffs were coming or going meant that success could still be found, but not if companies focused on one area or region for sole supply. Companies that succeeded did so because they adjusted.

Economic Uncertainty: A Constant Reality

In a world of constant evolution and change within our industry, economic uncertainty has been the one constant throughout the last century. World wars, conflicts, and territorial battles are nothing new, no matter what 2025 wants to tell you. In fact, one does not have to be Sigmund Freud to know that even long after the current conflicts are resolved, more will begin, as it is human nature to always want more.

The same can be said for successful businesses. There is always a desire for more, but for successful businesses to remain successful, growth must be done the right way. Certainly, due diligence with a careful eye to EBITDA is largely the focus of any merger or acquisition target, but it remains shocking how many bad deals look good on paper but would have a hard time passing the eye test.

The Cautionary Tale

As recently as 2026, we find that the dream marriage between Saks Fifth Avenue and Neiman Marcus is ending. The two luxury retail brands were poised to take over high-end fashion retail. In just over a year, financial distress, leadership changes, and store closures led to a Chapter 11 filing. The aftermarket has seen this movie replayed many times in our own world. And right about the time a generation forgets, the next generation starts the process again, and a new cycle of consolidation begins and goes on until something breaks.

The Moral of the Story

The moral of this story about what's next should be to question everything. I have never been a proponent of "We do things this way because it is the way we have always done them." But sometimes even I must admit that the way we've always done things is the best way. However, it is impossible to know that without an examination through the lens of 2026.

Technology has brought new and exciting opportunities that could not even be dreamed of 30 years ago. So if an organization is still operating the same way without a thorough examination of the process, it is likely less efficient than it could be. Nobody knows or understands a business as well as a person or a team on the inside, and those employees have a fiduciary responsibility to question any practice or procedure that could be improved through a new way of thinking or a new technology that emerges.

Likewise, the leadership of the organization must actively promote this way of thinking from the top down as well. For it is only when the organizational plan is developed by leadership, with inputs from the employees in the trenches doing the work every day to bring products in and push them out, that make that plan a reality and the organization a modern success.