Retailers fear CIT failure could ruin Christmas shopping season


While many people expect a slow Christmas selling season thanks to the recession, retailers fear the situation could be even worse than expected if CIT Group (CIT) is allowed to fail. The fear is based on the fact that CIT caters to apparel and furniture manufacturers -- two of the hardest hit areas -- that typically need long lead times to produce goods and have high manufacturing costs.

Retailers place orders for their fall and winter merchandise right now. Without the cash they normally get from CIT, suppliers may not be able to buy the materials they need to produce goods. Retailers worry that without goods to sell there won't be a chance of recovery during Christmas -- the best selling season of the year.