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CIT: What Can Fashion Clients Do To Find Support? Menswear and Womenswear Financing Look For Alternatives

September 8, 2009

A few articles have emerged recently about CIT that are worth noting.

Bloomberg notes that Jeff Peek, CIT CEO, has been signed on for another year. He will now be at the helm for another year:

“The bottom line is that bringing in a new CEO is not going to fix anything for the company,” said Sameer Gokhale, an analyst with KBW Inc. “Jeff Peek knows the ins and outs of the current situation the company is in, so it makes a lot more sense to keep him on board as the CEO and allow him to help the company work through this issue with the regulators and the creditors.”

Forbes and the New York Times (through a Reuters feed) also are posting on the news.

In terms of where CIT’s factoring clients can go, Reuters reports that there are few other alternatives,  that factoring is the backbone of the CIT business and CIT’s collapse may mean an immediate bump in the number of industry bankruptcies:

Companies that lose access to these types of factoring loans — which run from a few million dollars up to $20 million or more — would face cash flow problems immediately, and that would mean more bankruptcies in retail, Carr said.

CIT spokesman Curt Ritter said the company’s factoring volume for the first six months of the year was $16.5 billion, vs $20.7 billion a year ago. He added that CIT continues to sign new factoring business and is committed to its clients.

CIT said it has 2,000 factoring clients that service 300,000 retailers and wholesalers. The business is estimated to be at least five times the size of its closest competitor Wells Fargo & Co (WFC.N), followed by others like GMAC and Rosenthal & Rosenthal.

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