Norwalk, Conn. -- A report released Wednesday by GE Capital found that the majority of retail CFOs are fairly optimistic about their industry, even though the outlook for the economy has soured.
According to the GE Capital Middle-Market CFO Survey, 58% of retail CFOs believe their revenues will increase in 2011. However, that has dropped from 80% in the first quarter. Less than half – 42% -- expect to increase capital expenditures, up from 38% in the first quarter.
“Although the optimism we saw six months ago has tempered a bit, CFOs are confident in their ability to manage operations through changing market conditions,” said Jim Hogan, senior managing director, GE Capital, Corporate Retail Finance. “After completing over $2.1 billion in retail finance volume this year, we continue to see an increase in retailers with stable cash flows, lean operations and clean balance sheets shifting from survival mode to seeking finance to rebuild inventory and expand conservatively in new or existing markets.“
In other key findings, 58% plan to increase the cost of their products, a sentiment that remained consistent with the previous survey. Forty-six percent expect the availability of consumer credit to improve marginally in 2011, down 10 percentage points since the first quarter of 2011. Most (72%) see discount spending as the segment of the market that will likely grow the most in 2011. Twenty percent believe luxury spending will grow.
A majority (68%) expect their financing needs to remain the same compared with 2010. And, although slightly down from the first quarter of the year, 68% indicate they plan to make additional hires in next 12 months.