It’s not uncommon in today’s retail market that large companies who have been around for years are forced to file for bankruptcy. With growing competition from online retailers, including Amazon, stores have continued to see a decrease in foot traffic and overall sales. Retail stores have accrued debt from overstocking and increasing rent prices. If large, well known retailers such as Forever 21, Barneys New York, and Payless can’t beat the online retail presence, what does the future hold for smaller retailers?
Even with the upcoming holiday season, retail sales are projected to decline. According to theUS Commerce Department, retail sales fell in September by 0.3%, the first time since February. Concerns that manufacturing-led weakness and trade tariff challenges are hitting the broader market could potentially have a negative affect on consumers spending habits. If consumers decide to keep their spending to a minimum, retailers should prepare for the potential continuation of declining sales.
After meeting with Vice Premier Liu He of the People’s Republic of China, President Trump announced in a news release on October 11, 2019 that the duty increase from 25% to 30% on List 1, 2, and 3 products would be suspended. A final decision will be made later regarding the additional duties scheduled to go into effect December 15, 2019 for List 4B commodities.
Information regarding the phase one deal can be found in the White House news release here.
Following a World Trade Organization decision paving the way, the U.S. Trade Representative (“USTR”) has published a list of products form E.U. origin which will be subject to additional duty rates of 10% or 25% ad valorem, effective October 18, 2019.
We expect that a FEDERAL REGISTER notice will be published with the details including confirming the definition of the October 18 effective date; effective dates are commonly based on the date of entry.
As with other tariffs, close coordination with your carrier and EXPRESS representative is needed to avoid duties assessed to shipments arriving before the effective date. EXPRESS Trade Capital, Inc. is available to answer your questions, help assess impact to your business and discuss mitigation strategies. Reach out to us at logistics@expresstradecapital.com
One of the newest sustainability trends is making old
garments new again. Evrnu, a Seattle-based textile-technology startup, is making
old clothes and fabrics into new fibers that can be used for recyclable fashion.
Although their products are still being tested, Evrnu has
just launched a limited run of recyclable unisex sweatshirts for Adidas by
Stella McCartney, calling them “EVER-new.” The hoodies will not be available
for the public until 2020 but will be given to athletes to promote the new
sustainable line. “Right now, in the U.S., consumers dispose of about 80% of
their textiles directly into their garbage can. That’s the behavior we’re
really trying to tackle,” said Stacy Flynn, chief executive and co-founder of
Evrnu. Recycled textiles can be made into premium fibers which can be dyed and
woven into new fabrics made for all different types and styles of clothing. In
2016, Evrnu teamed up with Levi’s Jeans and launched a prototype of jeans made
only from repurposed cotton T-shirts.
Consumers are becoming more aware of certain industries’
toll on the environment, including the fashion industry. Although creating new
fibers still has some detrimental impact, the process uses a fraction of the
amount of energy and chemicals used to make polyester clothing. These recycled garments
may end up having a higher price-point, but as more people become aware of how
sustainability can help the environment, people may be willing to pay more.
ETC takes great pride in working with sustainable and eco-friendly companies. Contact us for all your factoring needs!
After meeting with President Xi over the weekend, President Trump announced decisions regarding the bilateral trade dispute. The President announced that while current tariffs will remain in place, he will not move forward with additional tariffs as negotiations continue. Therefore, there are no immediate plans to implement Tranche or List 4 trade-remedy tariffs.
The United States Trade Representative recently concluded seven days of hearings on the proposed List 4. The testimony and comments solicited from the public as part of the List 4 review may influence the products to be included and tariff rate if and when any additional trade-remedy actions are taken. But for now, any action on List 4 is on hold.
If you import from China, Express Trade Capital is here to assist with trade strategies to minimize the impact, apply for exemptions, and process refund claims where exemptions have been granted. Click here to contact Express Trade Capital for expertise and support. We are here to help.
Late Friday night the President announced successful negotiations with Mexico. With a signed agreement addressing illegal immigration, the President has suspended indefinitely the planned tariffs against Mexico.
The 5% tariff on goods from Mexico will not go into effect on June 10, 2019.
President Trump has announced plans to impose 5 percent tariffs on all goods imported from Mexico, rising to as high as 25 percent until – according to the White House – the Mexican government stems the flow of migrants. While most specifics are not yet known – conceptually, tariffs will become effective June 10 and gradually increase by 5 percent each month until they reach 25 percent in October.
What we still don’t know:
If the action is to be administered by the date
of export
If all exports from Mexico to the US are covered
including non-Mexican origin goods exported from Mexico and the US goods returned
Whether NAFTA benefits for duty and merchandise
processing fee will be allowed
Whether these tariffs are eligible for drawback,
among others
Per last week’s announcement, the White House has raised existing tariffs on $200B worth of Chinese imports from 10% to 25% and is now threatening new tariffs of up to 25% on an additional $300B worth of Chinese imports as part of its ongoing trade war with China. The latest list targets a wide variety of goods, including apparel, accessories, food and beverage products, and livestock.
President Trump seems
optimistic about reaching an agreement with Chinese President Xi Jinping and downplays the conflict
as a “little squabble…because we’ve been treated very unfairly for many,
many decades.” The proposed changes will likely take effect in late
June or July unless a trade agreement can be reached before
then. Importers
should begin preparing to either pay the newly raised tariffs or
acquire their goods elsewhere.
Talk to our team
today to
learn how ETC can help you plan for the increased costs your business will incur due to the new tariffs and how to protect your
business during these uncertain times.
Due to delays in establishing a trade deal between the US and China, the President unofficially announced plans to raise the trade remedy tariff from 10% to 25% effective Friday. This will seemingly apply to all List III goods. The President also suggested a possible extension of the trade remedy tariffs to all imports from China.
Although an official notice has not been published yet, it is wise to prepare for the tariff increase as of May 10 if you import any included goods from China.
Innovation, in every sense of the word, has taken over. The combination of consistent technological advances and a global market in flux has changed the culture and functionality of business operations on a global scale. One of the most remarkable results of this has been a rise in creative financing methods designed to serve new business models or those that were previously difficult to fund.
Although some funding options are universally available to
those with strong credit (i.e. SBA loans for new small businesses), managing a
business’s debt and retaining maximum equity can be a tricky balance,
particularly if you have lackluster credit or no credit at all. Fortunately, financiers
are creating new services and creatively applying existing ones to accommodate
businesses that previously didn’t exist or had limited access to sustainable funding.
Here are a few of the most accessible and adaptable forms of financing
available.
Inventory Financing
If you sell seasonally specific or highly specialized
products, inventory
financing is a great way to maintain your working capital
without giving up equity or accruing excessive debt. For example, let’s say you
sell specialty liqueurs year-round, but approximately 70% of your sales occur
in the month leading up to Valentine’s Day. Even with healthy annual sales volumes,
this inconsistency can complicate year-round operations and strain your
resources.
With inventory financing services, your financier will
simply store your unsold inventory in a secure third-party warehouse, then
provide you with a loan or line of credit, using the stored inventory as
collateral. Since you won’t need those bottles until next January, you’ll have
plenty of time to supplement your operational funds, pay off the funding you
receive, and distribute the goods in time for Valentine’s Day. Businesses that
benefit most from inventory financing are wholesalers who sell non-perishable
consumer goods, as they needn’t worry about a lack of quality control if their
inventory spends weeks or months in storage before distribution.
Business Line of
Credit
Although aline of credit
isn’t exactly a new method of
financing, its versatility makes it worth mentioning in this context. Since a
massive proportion of new businesses don’t sell tangible goods, the lack of
readily available collateral can make it difficult for them to secure funding. Unsecured
lines of credit are specifically useful for this because, much like credit
cards, they don’t necessarily require traditional forms of collateral. Lines of
credit are also like credit cards in that if you consistently pay off your
balance, cash advances up to the full amount in your assigned credit line are
available to you at any time.
Equipment Financing
For businesses that sell perishable goods or don’t sell
goods at all, equipment financing is an attractive option. If your business
uses expensive appliances or computers, you may be eligible to receive a loan
or line of credit against your equipment, much the same way an individual would
against a car or real property. Provided that the value of your equipment is
equal to or greater than your business’s financial need, this is one of the
simplest options. Most businesses in the service industry can take advantage of
this, including some that are particularly difficult to finance like restaurants,
medical practices, laundromats, and factories.
Short or Medium-Term Loans
Short or medium-term loans from private lenders are a
somewhat expensive option, but they can be extremely useful if your business
needs cash immediately and can pay it back very quickly. These loans are
generally approved within a day and as a result, have higher interest rates
than a standard bank loan would. If you receive a large wholesale order for
which you expect to receive payment immediately, a short/medium-term loan can
provide you with the cash you need to produce and ship the goods and bridge the
financial gap that can occur when you have to pay to fulfill an order before
you receive any payment from your customer. There are a few ways to address
this problem, but if timeliness takes priority over cost, this kind of loan is
the best choice.
Purchase Order
Financing
If you’re dealing with the cost prohibitive nature of production, but don’t have particularly good credit, purchase order financing might be your best option. Purchase order financing (sometimes called “PO funding”) relies on the creditworthiness of your customers rather than that of your own business. You receive a cash advance against confirmed, open purchase orders to help pay for production of the orders in question. This kind of financing also allows significant flexibility and can combine with other financial arrangements like receivables financing. This means you can easily establish a seamless system that allows you to fulfill orders quickly and consistently without potentially draining your operational funds or accruing more debt than you can manage.
In short, funding options have never been more plentiful. If
your business needs a financial boost, there is likely a perfect solution to
your needs and limitations. Be sure to research your options and choose a reputable
lender who will walk you through its process and fees to ensure
that you get the best solution for your business and budget.
