Middle-market retailers are under particularly intense pressure from the COVID-19 outbreak — they lack the resources that larger retailers can tap to survive the crisis, and they may not qualify for the same relief being made available to smaller companies. This market segment employs 30 million people and accounts for a significant chunk of the larger retail landscape, according to L.L.Bean, and their losses could have a severe impact on the economy as a whole.
“If we let all of the middle of retail fail, I fear the ripple effect in terms of employment and thus consumer spending could significantly delay any recovery,” said Nikki Baird, VP of Retail Innovation at Aptos in a RetailWire discussion.
Federal relief is available for small retailers with 500 or fewer employees, in the form of small business loans made available through the recently enacted federal stimulus package. However, the regulations exclude most middle-market retailers, a detail L.L. Bean has called on Congress to fix in its future efforts.
“I think it’s a really serious situation, and I actually don’t think it’s getting enough attention,” said Stephen Smith, CEO of L.L.Bean in an interview with CNBC.
While industry experts broadly agree with Smith, some noted that middle-market retailers can’t rely on government aid. The House and Senate are not scheduled to meet again until April 20, and the wide-reaching effects of the COVID-19 pandemic may mean targeted assistance never appears.
“Virtually every business is being affected by the crisis and can make a strong case for federal government support,” said Mark Ryski, Founder and CEO of HeadCount Corporation in a RetailWire discussion. “But when you consider the challenges the federal government has keeping people alive and fed, considering the troubles of yet another industry is becoming numbing. While I believe that Mr. Smith raises excellent points and concerns, the federal government is so preoccupied with life-saving efforts, I just don’t think middle-market retailers are going to hit high on the priority list.”