The nation’s retail industry is swamped with stuff and short of cash. As stores reopen full of merchandise from March that no one will want in June, retailers are struggling to make room for summer goods trapped in overstuffed warehouses.
With five big retailers having filed for bankruptcy in May, some of the industry’s survivors can’t get financial backing for their holiday season orders—prompting an urgent appeal to the Treasury Department and Federal Reserve for help, The Washington Post reports.
Even though stores were closed for much of March and April, huge amounts of shoes, shirts, suits and swimwear poured into the U.S. from global supply chains that continued churning despite the pandemic.
Analysts say the surplus of inventory, combined with slowing sales, has put countless retailers in a tight spot to fund future purchases. As the industry reopens, a tightening of credit conditions could dampen the rebound, according to Stephen Lamar, president of the American Apparel and Footwear Association.
Without a Treasury or Fed guarantee of its routine financing, the retail industry could suffer “a commercial credit crisis that threatens to seize up our economy and stall the safe restart in its infancy,” the association will warn Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome H. Powell in a letter early this week. The trade group represents more than 1,000 name-brand companies, including manufacturers and retailers. Read the full story.
