The Credit Edge by Bloomberg Intelligence Trade War Is Driving Retailers Nuts, Says Alix’s Etlin
Apr 17, 2025
Holly Etlin, Managing Director at AlixPartners with over 30 years of restructuring experience, shares insights on the retail crisis exacerbated by tariff chaos. Retailers are struggling with order cancellations and pricing amidst rising bankruptcy costs. Etlin discusses how asset-based loans are becoming critical lifelines and highlights the turnaround strategies of Tailored Brands. The conversation delves into the pressures of demand forecasting and the complexities of negotiations in a volatile market, emphasizing the need for resilience and adaptability.
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Tariff Chaos Mirrors COVID Crisis
- Tariff chaos disrupts retail operations similarly to the COVID-19 pandemic despite stores remaining open.
- Retailers face unpredictable pricing, inventory, and order decisions amid fluctuating tariffs and global supply issues.
Retail Bankruptcy Timing Insight
- Retail Chapter 11 filings peak in December and January due to higher available cash.
- This liquidity timing allows a more effective bankruptcy or liquidation process.
Declining Inventory Values Squeeze Credit
- Asset-based lending facilities rely on inventory liquidation value, which has been declining.
- Recent retail liquidations underperform appraised inventory values, causing lenders to tighten credit.