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After months of deteriorating sales, Richmond, Va.-based Circuit City Stores Inc. pulled the plug on its 567 outlets in January as it failed to find a buyer or secure adequate working capital. A few days earlier, the 104-year-old regional department store chain Gottschalks Inc. filed for bankruptcy protection as it sought a buyer or additional capital. Other blow-ups could follow, analysts say, as retail sales remain soft and credit remains tight. Meanwhile, more businesses–even those in far healthier sectors–are bracing for possible cash flow shortages, recent surveys show. Nearly 80% of U.S. companies say economic turmoil has hurt business with 67% citing tightening cash flow as a top concern, according to the Credit Research Foundation, which represents financial and working capital executives of manufacturing and banking companies.
Concern over the impact of higher rates on the high-growth, high-valuation sector seems to be outweighing optimism over tech companies’ earnings.
Meanwhile, president of National Foreign Trade Council warns: “This can’t be a mechanism to start raising tariffs on everything. There’d be no end to it.”
Copyright © 2018 ALM Media Properties, LLC. All Rights Reserved.
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