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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Show Progress to Gain Lender Support
- Lenders tend to work with retailers showing credible turnaround plans and improving store performance.
- Demonstrating positive test results and strategic direction encourages lenders to provide relief.
Tariffs Amplify Consumer Product Risks
- Most consumer products are imported, making them vulnerable to tariff-driven price increases.
- Retailers now face tough negotiations on pricing and order quantities amid anticipated demand shifts.
Small Items Hit Hardest by Tariffs
- Lower-cost, smaller items are less diversified from China and more affected by tariffs.
- Price-sensitive consumers may reduce purchases of items like craft goods and small electronics.