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Financial Optimism

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It’s comforting to know that CFOs at middle-market U.S. retailers are feeling optimistic about the industry and the economy. More than half (51 percent) expect the industry to grow over the next 12 months -- an increase of 25 percentage points over the previous GE Capital U.S. Mid-Market Survey, conducted in the third quarter of 2011.

“Although still cautious, we are seeing an increase in retailers who are moving out of survival mode and seeking finance to reinvest in and grow their businesses,” says Jim Hogan, senior managing director, corporate retail finance for GE Capital.

Retail CFOs believe labor costs and energy costs, including oil and gas, will have the most significant impact on their businesses this year. Still, they’re investing more in equipment and general capital expenditures, and 72 percent expect to hire in the next 12 months.

Other key findings: 74 percent expect their company’s revenues to increase this year; 38 percent predict profit margins will increase; 48 percent expect the availability of consumer credit to improve marginally this year; and 72 percent expect the discount category to be the biggest area of consumer spending this year.

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