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Retail Sales Rise in July as Two Retailers Go Bankrupt, Report

July 22, 2019, 08:55 AM
Filed Under: Retail

Retail industry watchers expressed optimism about an increase in retail sales in June as two retailers filed for bankruptcy during the late June through early July period, according to an analysis by S&P Global Market Intelligence.

U.S. retail and food services sales increased 0.4% on a seasonally adjusted basis to $519.89 billion in June from the previous month, according to a report released July 16 by the U.S. Census Bureau.

"These are impressive results showing that the consumers remain engaged and that consumer spending gave a boost to the economy in the second quarter," NRF Chief Economist Jack Kleinhenz told S&P. He added that the numbers are "consistent with elevated consumer sentiment, healthy household balance sheets, low inflation and, wage and job gains."

Kleinhenz said trade uncertainties continue to weigh on the long-term outlook even as the possibility of tariff increases has subsided for the moment.

"We have seen some better recovery in retail sales, which we have expected for a few months now, so it is consistent with what we are seeing in terms of the job market and in terms of the income growth," said James Bohnaker, associate director at IHS Markit. "So, as long as that remains a pretty solid trend, then retail sales should follow suit."

Meanwhile, two Market Intelligence-covered U.S. retail companies filed for bankruptcy in late June and early July. The filings bring the bankruptcy count for 2019 to 20.

Tara Jewels Holdings Inc., which imports and distributes diamonds and jewelry, filed a voluntary petition for reorganization under Chapter 11 on June 21.

Fashion accessories retailer Charming Charlie Holdings Inc. on July 11 filed for Chapter 11 bankruptcy protection for the second time. The company listed its assets in the range of less than $50,000 and liabilities of $50 million to $100 million. The company first emerged from bankruptcy on April 24, 2018.

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