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The State of Retail: How Did We Get Here and What’s on the Horizon?
October 25, 2023
By Cassie Rosenthal
While retail data reported at the mid-summer mark pointed to a strong labor market, steady consumer spending in certain categories and retail sales up from last year for several straight months, the data only tells one side of the story. The numbers are merely inching forward, as growth across many sectors has been sluggish, if not altogether fl at. This year has unexpectedly been a mixed bag for the retail and credit market, and with continued volatility and an overall lackluster economic forecast, businesses and lenders must be prepared for any scenario.
A seasoned team of commercial finance experts from Rosenthal & Rosenthal joined The Secured Lender for a roundtable discussion on the current state of the retail and credit market and its impact on factoring, asset-based lending and purchase ordering financing. Rosenthal’s EVP and head of credit, Anthony Verrilli, and three of the firm’s portfolio managers, Derek Sigler (EVP, Northeast Region portfolio manager), Bertie Pujji (EVP, Western Region portfolio manager) and Kirk Brown (EVP, Southeast Region portfolio manager) shared their observations and insights on the challenges clients and prospects are facing in the current economic climate and how they are responding. With a unique vantage point spanning multiple industries and geographic regions, the Rosenthal team weighed in on where we are right now, what we can expect to see more of in the second half of 2023 and how we should be preparing as we look ahead to 2024.
Where We Are Now is Not Where We Thought We Would Be
What are you seeing and hearing about the credit environment right now and how is it impacting the retail sector?
Verrilli: Most economists covering retail thought we’d be in a better place than we are. Rising interest rates are affecting everyone – consumers, manufacturers and retailers alike. And having to borrow money at more than twice what it cost to borrow two years ago really puts a damper on liquidity.
Sigler: The outlook going into 2023 was mostly positive and borrowers were excited about lower freight costs, better pricing and what we hoped would be increased demand. Activity was expected to pick up by now, but things are still very sluggish. It’s looking more and more like it won’t be until the second half of 2024 before things bounce back.
Pujji: Consumer demand continues to be weak in many industries and sales for most clients are way down, neither of which we expect to improve this year. That, coupled with the cost of borrowing being through the roof, and clients are really seeing a hit to their bottom line
Click here to read the full article.
A seasoned team of commercial finance experts from Rosenthal & Rosenthal joined The Secured Lender for a roundtable discussion on the current state of the retail and credit market and its impact on factoring, asset-based lending and purchase ordering financing. Rosenthal’s EVP and head of credit, Anthony Verrilli, and three of the firm’s portfolio managers, Derek Sigler (EVP, Northeast Region portfolio manager), Bertie Pujji (EVP, Western Region portfolio manager) and Kirk Brown (EVP, Southeast Region portfolio manager) shared their observations and insights on the challenges clients and prospects are facing in the current economic climate and how they are responding. With a unique vantage point spanning multiple industries and geographic regions, the Rosenthal team weighed in on where we are right now, what we can expect to see more of in the second half of 2023 and how we should be preparing as we look ahead to 2024.
Where We Are Now is Not Where We Thought We Would Be
What are you seeing and hearing about the credit environment right now and how is it impacting the retail sector?
Verrilli: Most economists covering retail thought we’d be in a better place than we are. Rising interest rates are affecting everyone – consumers, manufacturers and retailers alike. And having to borrow money at more than twice what it cost to borrow two years ago really puts a damper on liquidity.
Sigler: The outlook going into 2023 was mostly positive and borrowers were excited about lower freight costs, better pricing and what we hoped would be increased demand. Activity was expected to pick up by now, but things are still very sluggish. It’s looking more and more like it won’t be until the second half of 2024 before things bounce back.
Pujji: Consumer demand continues to be weak in many industries and sales for most clients are way down, neither of which we expect to improve this year. That, coupled with the cost of borrowing being through the roof, and clients are really seeing a hit to their bottom line
Click here to read the full article.
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