RETAILERS AND SUPPLIERS OPTIMISTIC ABOUT HOLIDAY SEASON BUT REPORT DISAPPOINTMENT IN SUMMER SEASON SALES
August 14, 2012
NEW YORK – August 14, 2012 – Importers and manufacturers who sell to America’s major retailers are preparing for a surprisingly stronger winter shopping season than expected, according to Capital Business Credit (CBC), a non-bank lender that services the retail sector.
According to the quarterly Global Retail Manufacturers and Importers Survey, 77 percent of importers of retail goods believe the fall/winter season will be the same or stronger than last year.
For the holiday season specifically, a third (33 percent) indicated that they have received an uptick in year-over-year orders while 44 percent said they have received the same amount of orders as 2011. Furthermore, 43 percent said that they believe holiday sales will be stronger than last year. That said, there is reason for pause as nearly a quarter (22 percent), have seen orders decrease from last year’s holiday season.
When it comes to the kick-off of the fall/winter season, “back-to-school,” a third (33 percent) believes it will be stronger than last year, while 54 percent believe it will be the same as last year.
“Like many other recent economic indicators, we are getting a lot of mixed signals from importers and manufacturers of retail goods,” said Andrew Tananbaum, executive chairman of CBC. “We do believe there is the potential for growth as we head into the back-to-school and fall seasons.”
The summer shopping season, traditionally a slower period for retailers was just that according to the CBC survey. While a little more than a quarter of retailers reported top-line sales growth year-over-year, 66 percent of respondents reported that this growth was supported by heavy discounting to move merchandise, which impacted the bottom lines of both the retailer and the importer.
“We anticipated summer would be stronger than it actually netted out being. From what we heard from both the manufacturers in China we work with, and the importers in the U.S., summer, was a disappointment,” Tananbaum added. “That said, we remain cautiously optimistic for both back-to-school and holiday sales. Importers are still stocking shelves, factories are still churning out goods, and consumers are still buying.”
Additional Survey Findings with Respect to Summer:
• A little more than a quarter (28 percent) indicated that orders increased this summer
• 76 percent said summer sales will be the same or weaker (31 percent indicated it would be the same and 45 percent indicated it would be weaker)
• Of those that believe the summer season will be weaker, 40 percent believe it will be 3-5 percent weaker than last year. A third (32 percent) believe it will be 6-10 percent weaker than last year
• Sixty-six percent indicated that retailers are relying on discounting this summer with the majority (73 percent) indicating that this type of discounting would impact the margins for retailers
About Capital Business Credit
Established in 1988, Capital Business Credit, LLC (www.CapitalBusinessCredit.com) is a commercial finance company specializing in providing creative supply chain financing solutions. The Company’s service offerings include: full-service factoring; immediate cash for receivables; single debtor credit coverage; letters of credit; accounts receivable management services; inventory lending; and international financing. CBC Trade Finance, a division of CBC, provides trade finance solutions for U.S.-based importers working with Asia-based suppliers (exporters). Capital Business Credit is based in New York, with office in Hong Kong; Shanghai; Los Angeles; Charlotte; NC; and Ft. Lauderdale, Fla.
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