The Weekly Shop Report
CIT teetering on bankruptcy means bad news for bare feet.0
New York shoe savvy mavens, hold your breadth. A sample-sale laden season left our fancy feet thinking we had finally reached shoe shopping nirvana, however, news of CIT’s possible bankruptcy might just stop us in our tracks. Sure the sales ignite feels of glee and shopper’s bliss, but if it means less unique, designer footwear, will it all have been worth it?
CIT Group, Inc., one of several firms that serves financial support for the apparel and footwear industries, teetered on the brink of bankruptcy last week seeking bailout money. The American Apparel and Footwear Association estimates 60% of the industry is represented at least partially by CIT Group, causing many companies panic about their ability to remain afloat. CIT buys company’s accounts receivable and opens letters of credits. WWD reported major footwear retailers will remain safe as their financial matters are either handled in house or diversified. Smaller retailers and less known designers might not make it through. Even if CIT does receive bailout money, it will likely tighten it’s standards for factoring relationships leaving less financially stable firms and retailers with no where to go.
Sad face. CIT’s unshaky ground induces guilt where there used to be giddy over the almost-free-footwear consumers have been taking advantage of all season. Considering the stores that may have to close their doors, designers, owner and associates who would lose their jobs and makes us wonder if the reduced-price additions to our shoe collections were are really worth it.
No, no it’s not. A failure on the part of CIT would, in addition to slicing up to 1 million jobs, present problems for the entire industry. While CIT is a viable business that works with much of the industry and will likely be snatched up by someone else, the shift in the attitude towards the small vendor and the question of credit remains. Whether it’s small business loans, financing or factoring, most of apparel and footwear will in some way be affected. Many small companies are now scrambling to find credit elsewhere while some analysts are predicting a dismal outcome for both retailers and wholesalers.
For our part, there is little we as consumers can do at this point but continue to support the industries that, in addition to comforting us in the form of retail therapy, employ some of our nearest and dearest.
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