The Tribune

* Federation chief: Members warning of final closures

* At the brink unless curb-side limits ease immediately

* 'Who wants to be terminating people going into Xmas?'

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Bahamas Federation of Retailers (BFR) yesterday revealed multiple members will reach "the point of no return" and close permanently as early as this week unless curb-side restrictions are lifted.

Tara Morley, its co-president, told Tribune Business that the inability to generate sufficient cash flow to purchase and clear Christmas inventory, due to the Government's present COVID-19 measures, had pushed many merchants to the brink of closure with the festive season less than two months away.

Adding that retailers ranging from "long-standing businesses to entrepreneurial start-ups" had contacted the Federation in the past few days to warn they will cease operations unless the Government removes curb-side limitations this week, Ms Morley warned the situation threatened to create "an unfortunate amount of joblessness" headed into the Christmas period.

Festive sales often account for up to 40-50 percent of a retailer's annual business volumes, generating the cash flow and profits that help to carry them through the remainder of the year, but COVID-19 lockdowns, curfews and restrictions - coupled with depressed consumer spending - mean many will struggle to enjoy their traditional Christmas boost.

"As of today and yesterday, I have had several businesses write in from the Federation that said that unless an announcement is made this week with regard to the curb-side restriction, they will have to shutter their doors permanently. That means I have to furlough my staff and jobs are gone," Ms Morley told this newspaper.

“One week will do that. It pushes them to a point of no return with missing the holiday season entirely, because no one is expecting it to be last year’s holiday season or the December before that. But it would have been a buffer for cash flow, to assist with the catch-up of being closed for five out of eight months that we have all been shut down.

"They simply cannot afford to hold on any longer, and with what little they have in their bank accounts they will have to use that to make their staff redundant and close down the business and cease operations. These are everything from long-standing businesses to entrepreneurial start-ups. I have received from both messages just like that, which are obviously heart-breaking and not anything anybody wants to be doing," she added.

“Leading into the holiday season, who wants to be terminating people? Unless the curb-side restrictions are lifted it is going to create an unfortunate amount of joblessness for Bahamians heading for the holidays.”

Ms Morley said many retailers required significant lead time to place their Christmas inventory orders, but the uncertainty created by the COVID-19 pandemic and the Government's response - veering between tightening restrictions and then loosening them - has made this task much more difficult

“The way that it works with the lead time depends on the type of retailer and the category of retailers," she explained. "So lead time can be anywhere from six months in advance to order or one to six months. So, for instance, in clothing, orders that should be coming in now were placed back in June and July when we were open.

"What businesses have done is that they already placed conservative orders not knowing what the future would hold, and they have instructed their vendors that they have either cancelled their orders or they have said to hold their shipments because they are waiting to see what’s going on with curb-side restrictions.”

Ms Morley added: “Given the fact that we have been closed down five out of the last eight months, because you can’t really count curb-side as being open because you’re not moving sufficient inventory while they are open for curbside, there is an inability to bring in merchandise. There is just no cash flow to support it.

“Now, for instance, with my company, Coles of Nassau, I have shipments on hold, and if I were to OK that shipment this week for them to ship it, it will arrive at my freight forwarder next week some time, maybe November 9.

"So I won’t get it until some time the week of November 16 or November 23, and if we go past this week that means that people are cutting it - really cutting it close - for getting stock in time for Christmas. That means with all of the restrictions, with social distancing and what have you, it is taking a lot longer to clear your shipments off of the dock than it ordinarily would.”

“If you can’t bring in your goods, have them in your store in time for Christmas and you miss the entire season, you cannot make up your Christmas season in one week of being open."

Ms Morley's comments came after Dion Bethell, Arawak Port Development Company's (APD) president and chief financial officer, told Tribune Business earlier this week that the traditional spike in retail imports that traditionally occurs during the fall as merchants stock up on festive industry has been noticeably absent to-date.

Bahamian non-food retailers typically generate 15 percent of the Arawak Cay-based port's imports, and Mr Bethell attributed the missed "peak" that normally boosts such activity to depressed consumer spending and COVID-19 restrictions that have slashed industry sales by forcing all operators to curb-side.

Suggesting that many merchants were sitting on old inventory they are unable to move, the APD chief told this newspaper: "What we usually see around now, but which has not occurred, is we'd be in the peak of the season where we see a lot of the Christmas volumes for a lot of retail stores.

"Our volumes indicate that, as a result of curb-side service and inventories that a lot of retailers are sitting on, a lot of those volumes are not coming through. If I were to take a guess, it's about 15 percent of our [container] volumes where we would see an increase over and above what they normally would be between the months of October, November and the first two weeks in December.

"That is where we see that spike in the average monthly volumes. It has not happened as yet, and we're beginning the first week of November and have not seen that occurring."

Mr Bethell confirmed this impact was also being felt at the Nassau Container Port, which BISX-listed APD operates, adding that present restrictions were likely driving Bahamian shoppers online to the benefit of courier companies/freight forwarders rather than the port and its shareholders (Bahamian public investors collectively own a 20 percent stake).

"I don't know if it's as a result of where we're at," the APD chief said of the reduced retail volumes. "A lot more persons are focused on purchasing online, and oftentimes when they do those volumes come into the country by air freight as opposed to ocean freight.

"Those small items, gifts that people purchase for significant others, family and friends, because they cannot go into retail stores and see, touch and purchase what they want, persons are looking for that merchandise online and forwarding it via air freight as opposed to the likes of Kelly's bringing it in by ocean freight.

"I'm not suggesting the volumes are not coming in. They're not coming in by ocean freight based on the volumes we're seeing thus far."