Daily News: August 14, 2012

Retailers, Suppliers Anticipate Stronger Winter Shopping Season


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% 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%) indicated that they have received an uptick in year-over-year orders while 44% said they have received the same amount of orders as 2011. Furthermore, 43% said that they believe holiday sales will be stronger than last year. That said, there is reason for pause as nearly a quarter (22%), 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%) believes it will be stronger than last year, while 54% 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.”

v
Summer

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% 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%) indicated that orders increased this summer

  • Seventy-six percent said summer sales will be the same or weaker (31% indicated it would be the same and 45% indicated it would be weaker)

  • Of those that believe the summer season will be weaker, 40% believe it will be 3% to 5% weaker than last year. A third (32%) believe it will be 6% to 10% weaker than last year

  • Sixty-six percent indicated that retailers are relying on discounting this summer with the majority (73%) indicating that this type of discounting would impact the margins for retailers

    Established in 1988, Capital Business Credit is a commercial finance company specializing in providing creative supply chain financing solutions.