CIT bankruptcy a problem for retailers

Carriers have been waiting and hoping for retailers to restock depleted inventories. With consumer demand still weak, retailers have been cautious about ordering more goods. The situation won't be helped by Sunday's Chapter 11 bankruptcy filing by CIT Group Inc., an important provider of credit to companies that supply retailers.

CIT provides credit used by 2,000 vendors that supply merchandise to retailers, including an estimated 60 percent of footwear suppliers. When CIT was teetering on the edge of bankruptcy last summer, the National Retail Federation said in a July letter to Treasury Secretary Timothy Geithner and Sheila Bair, head of the Federal Deposit Insurance Corp., that CIT was "most certainly too important to the retail industry to be allowed to fail."

Craig Sherman, vice president of government affairs at the National Retail Federation, was quoted today by the Associated Press as saying most holiday merchandise  is already in retailers' distribution centers but that CIT's difficulties could cause problems in financing orders  for the 2010 spring season.

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