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发表于 2009-7-19 05:46 AM
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发信人: babycrynot (不哭的小孩儿), 信区: Stock
标 题: Re: CIT危机的背后。
发信站: BBS 未名空间站 (Sat Jul 18 02:05:47 2009, 美东)
CIT collapse could ripple through retail industry
AP
NEW YORK – The possible collapse of a key lender is sending panic through
the retail industry, threatening to hang up deliveries of back-to-school
clothing and other merchandise and throw holiday ordering into disarray.
A bankruptcy filing by CIT Group would hurl more trouble at an industry
already hammered by the worst spending slump in decades.
The ripple effect could be as simple as a zipper maker that can't rely on
CIT to advance payment for orders. That would then hurt trucking companies
that would ship the zippers and overseas factories that need the zippers to
make dresses. The result could be mounds of zipperless dresses at factories,
piles of goods sitting on docks — and products not making it to store
shelves.
"CIT is like an octopus with its tentacles that reach out to so many
industries and sub-industries," said Jeffrey Knopman, a principal at Profit
Solutions Group, which helps suppliers recover chargeback money from
merchants.
A primary business of CIT is short-term financing, mostly to small- to
medium-sized businesses that can't afford to wait the 60 to 90 days it takes
to get paid for shipments to retailers.
This business, known as "factoring," also guarantees that suppliers get paid
by the merchants. Without that guarantee, suppliers would have to ship
goods at their own risk.
As the prospect of a CIT bankruptcy filing loomed, industry trade groups
increased their pitch to lawmakers to prevent the collapse of CIT, which
they say would imperil their small-business members and derail the already
fragile economy.
"This is a potential crisis for Main Street," said Kevin Burke, president
and chief executive of the American Apparel and Footwear Association. "The
industry is already battling less inventory and battling a recession. If you
can't get the product, how do you get consumers into the store?"
Bud Konheim, president of designer dress firm Nicole Miller, said any
disruption in manufacturing caused by a lack of financing could shut down
the pipeline for new goods. His company depends on CIT to finance its
fabrics.
"Everybody is frantically thinking about what could happen," said Konheim."
CIT reaches everybody in the business, from the fabric guy to the zipper guy
. If we can't get the zippers, we can't make the item. One little thing can
stop the whole process."
New York-based CIT serves as factor to about 2,000 vendors that supply
merchandise to 300,000 stores, according to Craig Shearman, spokesman at the
National Retail Federation. Analysts say 60 percent of the apparel industry
depends on CIT for financing, so other lenders taking up all the slack
would pose a big financial strain.
Any disruption in financing couldn't happen at a worse time for retailers.
Stores have slashed inventory to respond to lower demand, and this holiday,
analysts expect inventories to be down as much as 20 to 30 percent. Shearman
said that if suppliers can't finance their orders, consumers will see even
fewer choices in the stores.
Furthermore, he noted that if vendors can't get their financing, some
retailers may have to pre-pay for orders, which could put more financial
pressure on them.
Federal official negotiating with CIT knew a collapse would affect the
economy, a Treasury spokeswoman said Thursday. But because the company had
scaled back lending in previous months, she said, the economic hit would not
be as bad as some earlier predictions suggested.
Retail industry insiders argue that with other lenders already under
financial strain, many CIT clients may lose their financing options. That
could lead to another flurry of bankruptcies.
Harold Reichwald, an attorney in Los Angeles with the firm Manatt, Phelps &
Phillips, said CIT has been refusing requests from manufacturers to withdraw
credit balances — the equivalent of bank deposits, except that they are
not federally insured.
Already many of CIT's clients were scrambling to find other financing. But
Andrew Jassin, co-founder of apparel consultant Jassin-O'Rourke Group LLC,
noted that doing that takes time even for the financially healthy.
Melissa Savarino, owner of a Houston-based children's wear maker that has
CIT as a factor, said she is trying to find other financing from places like
Wells Fargo, but it's been difficult.
She noted that she panicked after not getting $11,000 from CIT on Wednesday,
though the funding was restored the next day. Next week, she starts buying
fabric for the holiday season but may have to be more conservative with her
orders.
"If CIT stops funding our business, and there is no one else to replace it,
then I can't go on," she said.
Harry Kazazian, CEO of privately held Exxel Outdoors Inc., the top U.S.
maker of sleeping bags, said that he withdrew as much of the company's money
as he could from CIT on Monday.
Kazazian is worried that the absence of federal help will have big
consequences.
"How could they leave these sectors twisting in the wind?"
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