Survey: Credit Squeeze Hurting Retailers
The credit squeeze that culminated in a major financial meltdown last week has been impacting retail businesses throughout 2008, according to a new study by BDO Seidman, LLP. The survey found that nearly half (41%) of CFOs at U.S. retailers have experienced a tightening of credit by their lenders. In addition, more than a third (37%) of the CFOs report a reduction of planned inventory purchases for 2008, further illustrating a difficult lending and economic environment.
“There are a number of factors that are weighing on retailers, but the compounding affect of reduced consumer spending and a restricted credit environment has been especially challenging,” said Doug Hart, a partner in the Retail and Consumer Product Practice at BDO Seidman. “We have read the headlines about the bankruptcies and government takeovers of financial institutions, but this shows the knock-on effect; retailers are now suffering from a drain on liquidity.”
The findings are from the most recent edition of the second annual BDO Seidman Retail Compass Survey which surveyed 100 CFOs at leading retailers with revenues of more than $100 million, including 24% of the top 100 based on annual sales revenue. The survey was conducted in August and September of 2008. Among the findings:
- One-in-four (24%) of the retail CFOs cite that they have had, or plan to have, significant staff reductions in 2008.
- Thirty-six percent of the CFOs say that they have, or will, close stores in 2008, with 27% citing that they will close more stores this year than they did in 2007. Consistent with other survey finds, the top 100 retailers are experiencing a more difficult climate than the other respondents. They are twice as likely to close stores, with 57% reporting that they have already or will close stores in 2008 and 33% of those retailers saying that they will close more stores this year as compared to 2007.
- On a more positive note, three quarters (77%) of CFOs have not or do not plan to delay store-opening plans in 2008. One-third (33%) of the CFOs at the top 100 retailers report reduced or delayed store openings in 2008, which is 10% higher than the other respondents.
- The majority (91%) of retail CFOs reported that the weak U.S. dollar has not increased their concern of being acquired by an international entity.
Stanton carpet names new execs
SYOSSET, N.Y. Stanton Carpet has named Barbara Skelly as director of marketing and Frank Boucek as Midwestern regional vp.
Skelly was previously at Designtex. She also held positions at F. Schumacher & Co., Imperial Home Decor Group and Maharam Textiles.
Previously at Beaulieu of America, where he was regional/territory manager for the past eight years, Boucek has also worked at Mohawk Industries, Image Carpet Mills and Galaxy Carpet Mills.
Wal-Mart continues charity with $100K for Haitian hurricane victims
BENTONVILLE, Ark. Wal-Mart announced a donation of $100,000 to the American Red Cross to support disaster relief for Haitians that have been impacted by Hurricanes Gustav and Ike in further efforts to provide aid to neighborhoods and people affected by the latest wave of destructive hurricanes.
“Because we touch communities throughout the Americas, we can help people in times of need in so many ways,” said Craig Herkert, president and ceo of the Americas for Wal-Mart Stores.
Wal-Mart Puerto Rico also made its own $7,000 donation to the Red Cross and a $3,000 donation to the Caribbean Haitian Committee. Several Walmart stores in Florida also held supply drives last week to collect hurricane relief supplies for victims.
“Wal-Mart is committed to helping these devastated communities,” said Joaquin Gonzalez Varela, Wal-Mart’s regional vp. “We know many of our Wal-Mart and Sam’s Club associates, especially in Florida, have family and friends in these areas.”
Wal-Mart has long been recognized as a corporate leader in the area of disaster relief. Responding to the impact of Hurricanes Ike and Gustav in Louisiana and Texas, Wal-Mart recently committed $2.5 million to assist with relief efforts. The company in 2005 helped the victims of Hurricane Katrina by donating more than $32 million in cash to aid emergency relief efforts. Earlier this year, Wal-Mart donated $3 million for disaster relief and reconstruction following the earthquakes in China.