According to Credit Suisse’s analysis, there have been 2,880 US store closings announced in the year to 6 April, compared to 1,153 at the same point last year. Historically, 60% of store closure announcements occur during the first five months of the calendar year and based on the current rate of closures; there could be more than 8,640 store closings this year, which will be higher than the historical 2008 peak of 6,200.
Credit Suisse’s data on retail store closures is yet another damning report on the state of the US retail industry. Research from Bank of America published at the beginning of last week, showed that after decent hiring activity in December and January, retail jobs contracted by a net 61,000 over February and March, which was initially chalked up to seasonal weakness.
However, analysis of Bank of America aggregated credit and debit card data showed a nearly 20% year-on-year decline in consumer spending within department stores during the first part of the year (greatly exceeding the financial crisis decline as shown in the chart below). This data leads the bank’s analysts to conclude that sudden surge in retail job losses is a structural, not temporary issue.
Small Business Owners prepare themselves with enough working capital to sustain themselves. Times are changing, so it's imperative to be pro-active. While lines of credit are reusable, small business loans are lump sum disbursements that fund your business when the need arises. Whether you're funding business growth or tiding yourself over between a management transition, a business loan can give you a rapid cash infusion and the flexibility to pay that amount back over a predetermined time frame. Business loans can be a good choice when growth is on the horizon and they are a longer-term solution than lines of credit. They can help businesses increase production, hire key talent or complete a product that will replenish your cash flow. Bottom line, the worst time to plan a cash infusion is when you need it. Be proactive, plan ahead, and create a relationship with a reputable funding source now, not in an emergency situation when you're forced to accept anything that's thrown at you. As always, we're here to help!