“5 Minute Capital” Podcast with CIT

As reported by CA Apparel News. Retailers are responding to the recession by keeping inventories lean, renegotiating their leases, and using technology to boost efficiency and maintain cash flow. That was the word from New York-based financial-services company CIT Group Inc., which recently held its “5 Minute Capital” podcast featuring senior CIT executives discussing market conditions and middle-market trends. The most recent podcast included Burt Feinberg, group head of CIT Retail Finance, discussing the results of a recent retail survey released by CIT and Forbes Insights. To listen to the podcast, visit...

SIA Reports Slow Pre-Season Ordering for Snow/Ski

CREDIT AND CASH FLOW PROBLEMS RESULT IN PALTRY PRE-SEASON ORDERS Results of the 2009/10 Orders survey indicate significant declines in pre-season orders for snowboard and alpine ski equipment.  Alpine ski equipment orders are down more than 20% and snowboard equipment orders declined more than 30% in dollars compared to last season’s orders.  Retailers discounted prices and sold less last season resulting in thinner margins and less cash flow to pay for 2009/10 season’s orders.  Additionally, retailers face a market in which credit is much more difficult to get and interest rates are poised to rise rapidly. The credit issue was exacerbated last month when the near bankruptcy of CIT, a major creditor to small businesses (including the sports industry), rocked markets worldwide. According to CIT, more than 1,000,000 business customers “depend on CIT to provide the financing they need to run their businesses. And for more than 100 years, CIT has remained committed to the lending needs of the small and middle market – providing needed capital to markets that other larger and smaller financial institutions often don’t.”  CIT’s near bankruptcy and the subsequent bailout by bondholders may result in exorbitantly high interest rates and difficulty getting terms other than “net 30” into the foreseeable future.  With limited cash and credit, retailers are curtailing their orders for the 2009/10 season. SIA conducted a short survey with members in July about the potential impacts of CIT’s funding crisis.  Most respondents worried that a collapsing CIT would hurt retailers who are already struggling from poor cash flow due to last season’s anemic margins and a very tight credit market.  The domino...

Who is CIT and what do they mean in our industry?

Label Networks put out one of the more informative articles I have seen on who CIT is and what impact if any they have on action sport retail? Thanks Kathleen and friends! So much can happen in a week. Or rather, 10 days. On July 12th news broke that CIT Group Inc., a major bank loan supplier to over a million small to mid-sized retailers and suppliers particularly focused in the fashion industry, was about to run out of money. CIT, which some estimate controls 60% of the apparel factoring market, was on the brink of filing for bankruptcy. On July 15th, the New York Stock Exchange halted trading on shares of CIT. In a combined effort, the National Retail Federation, American Apparel & Footwear Association, Council of Fashion Designers of America, and the National Counsel of Textile Organizations, among others, sent letters to Congress asking for bailout funds for CIT. However CIT was denied a bailout because it was deemed by the decision-makers doling out the bank bailout funds that CIT was not too big to fail. What this meant for suppliers and retailers over the last week was a major panic that they would soon have to shut their doors, which in essence would be detrimental to the fashion and retail industry in the United States. To back up a bit, CIT supplies what’s called “factors” or loans, many of them to businesses in fashion. Factoring are loans that keeps businesses afloat while waiting for sales. So basically, stores make orders and pay off these orders as sales of the items begin, but in the meantime, they...