Retail Sales Still Sliding

As this report from the WSJ shows, retail sales are still sliding. Given that we are now in May, this is problematic as I think that this coming Christmas season may be in jeopardy on two possible fronts:

1. Things recover but stores run out of certain items due to cautious ordering
2. Things don't recover and retailers get hammered, again.

There are three sides to purchase order financing. There are:

1. Commercial sales
2. Retail sales
3. Government sales

Most people are seeing a decline in #1 and #2, but an increase in #3. This is certainly an interesting time to be in this industry. The fact that many companies still cannot get conventional business financing at their local institution are making things easier since there is still deal-flow.

But the fact remains that the retail industry, especially large chains, are a major engine of the purchase order financing industry. Until thing improve in that market, things will be a little bit funky for purchase order financiers.

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