Friday, October 10, 2008

Credit crunch impacting retailers



Copyright: svilen001


The credit squeeze that culminated in a major financial meltdown last week has been impacting U.S. consumers, as well as retail businesses, throughout 2008.

According to a telephone survey of 100 CFOs at leading chains nationwidstudy by BDO Seidman, LLP, one of the USA’s leading accounting and consulting organizations:
  • Nearly half (41%) of CFOs at U.S. retailers have experienced a tightening of credit by their lenders
  • 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
  • One-in-four (24%) of the retail CFOs cite that they have had, or plan to have, significant staff reductions in 2008. When looking at the top 100 retailers specifically, 32 percent of those CFOs are experiencing layoffs this year
  • 36 percent of the retail CFOs say that they have, or will, close stores in 2008, with 27 percent citing that they will close more stores this year than they did in 2007.
  • three quarters (77%) of CFOs have not or do not plan to delay store opening plans in 2008.
  • nearly a third (28%) of the retail CFOs stated that they are evaluating, or considering changing from U.S. accounting standards to IFRS
  • 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

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