Major Distributors Drop Staff Stock Financing For Some A Problem
Major distributors are laying off staff some up to 50% of their entire workforce due to the Coronavirus epidemic, this is despite supply lines opening up in Asia.
Jierui Huang, a China based director of Ayonz said that manufacturing in China was “back to 90% and that supply was now getting back to normal.
She was not able to say whether the factories she dealt with are still going to be able to fund distributors in Australia or extend credit to distributors such as Ayonz as they have done in the past.
ChannelNews understands that prior to the downturn Melbourne based distributor Residentia was in discussions with a major retailer who was set to invest in one of their brands, this deal has now been put on hold.
Distributors have also been told to reel in their debtors by their insurance Companies or face losing debt insurance all together.
The move by retailers could see over 2,000 consumer electronics with Westpac chief economist Bill Evans expecting a 9 per cent peak in the unemployment rate at the end of June following the latest stimulus effort from the government. The rate is expected to fall to 7 per cent by the end of the year.
The economy is also expected to contract by 8.5 per cent in the June quarter and 0.6 per cent in the September quarter before lifting 5.2 per cent in the December quarter for a 5 per cent contraction through 2020.
Mr Evans said that aligning his GDP forecasts to the unemployment rate would normally result in a jobless rate of 17 per cent in June and 9 per cent by the end of the year but the Job Keeper plan announced on Monday enabled him to forecast a lower rate.
Retailers that are witnessing strong growth in store and online are Bunnings and Officeworks. Harvey Norman JB Hi Fi and The Good Guys are also getting good online traffic with some categories up over 15% Vs last year’s April sales.
Some retailers such as Bunnings have moved to open up new categories.