BY DARRELL DELAMAIDE
The current economic
climate has brought a host of
challenges to factoring firms
of all sizes, ranging from
dealing with the struggling
retail sector, wading through
unprecedented dealflow,
managing rising inventories
and nailing down accurate
valuations. In spite of the
challenging environment,
factors remain upbeat and
optimistic about the future.
The list goes on: Fortunoff, Sharper
Image, Linens ’n Things, Shoe Pavilion,
Steve & Barry’s, Tweeter, Circuit City,
fill in the blank. Retailers have hit hard
times, and these national franchises are
just a sampling of the bankruptcies in
the sector over the past year. Others are
sure to fold this year as what may turn
out to be the most severe recession in
postwar history takes its toll.
Distress in the retail sector has
thrown the spotlight on factors, which
are in the business of assuming credit
risk for their clients’ receivables from
retailers.
“Almost weekly, somebody goes
bankrupt,” says Jerry Sandak, senior
executive vice president at Rosenthal
& Rosenthal. “It’s good news and bad
news. People are clamoring for our
