Apparel retailers suffer less in credit crisis
06/10/2008
According to a report from Citi Investment Research, the global credit crisis is affecting apparel retailers in the United States less than other companies.
Analyst Kimberly Greenberger explained that the current financial climate will hurt apparel companies less hard because they tend to have lower levels of debt. “Our companies typically fund inventory purchases with cash on hand while some rely on available credit facilities,” she said, adding that of 17 companies in the garment retail sector that she covers, only five had net debt positions.
She concluded that while companies that need access to debt markets this year and next risk paying significantly higher rates, or being refused credit entirely, the issue was “not a major concern” for most apparel retailers.
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