(Bloomberg) – When Home Group Inc. The lawyer stood before the US bankruptcy judge asking him to destroy nearly $ 2 billion in retail debt, the reason was quick: rates.
This is a line that is shown more and more in the courtroom. Mosaic, a tile importer, accused them in a recent application. Just a few weeks earlier, it was a car part supplier Marelli Holdings Co. and Aluminium Trader Sinobec Group Inc. In total, the rates were set out as the main reason for the US at least 10 bankrupt in the US, when President Donald Trump first introduced a new wave of tolls based on Bloomberg data.
However, for many economists and analysts, the game is not holding the guilt of fault – at least not yet. On the one hand, it is just too early to have the latest duties on the business of companies, especially for companies that usually have several months of value inventory. In addition, the latest data shows strong employment growth, increasing wages and a constantly low signal of unemployed indicators that the economy is still in custody.
This is the latest department of a well-worn corporate bankruptcy game book, where companies attract their collapse for everything, starting from unstable consumers to currency oscillations-Net and bad weather-not, except their own mistakes. Although market watchers say that rates could eventually push many difficulties with firms over the country, they are currently regarded as an excuse to paint deeper problems.
“Companies are struggling, but the rates haven’t made them bankrupt,” said Stephanie Roth, a chief economist at Wolfe Research. “Until the labor market starts to break realistically, there is no great reason to believe that consumers should retreat or that the economy is weakening enough.”
Take everything at home that sells everything from the courtyard furniture to the rugs to the general wall decoration. Her troubles began well before the latest short rate tour.
The effects of the Covid-19 pandemic on supply chains have increased materials and labor costs, loaded with high debt after 2021. The takeover of private capital company Hellman & Friedman in 2021.
When consumers switched to more travel and leisure spending, as the demand for home goods decreased, it also decreased. 2023 Due to a decrease in credit estimate and pests.
Last month, the company based in Texas said its bankruptcy would close at least 26 out of more than 250 stores.
In the Repeo Park, in Queens, New York – the one planned to close – customers, boldly looking for deals, regretted his death.
“It’s a bit sad to see this go because it’s just much easier to get what’s right for your style,” said Diana Delacruz, a 22-year-old, who browsed things in the shop in the store.
The representative refused to comment at home.
Marelli, the supplier of car parts, for his part, stated in court that it was “severely affected” by wind winds led by automatic rates issued by Trump’s administration in March.
However, the company providing lighting systems and suspended Stel loss NV and Nissan Motor Co. has already faced industrial shocks, as electrification and automation of forced car manufacturers to change their strategy to cope with decreasing sales in the main markets.
“The market pressure that influences the entire automotive industry and the smaller production volumes that we started to see a year ago, for a long time before the current rates were set out, were the main problems that restricted our working capital,” said Fernando Vivanco, Marelli’s chief communications officer.
Some companies have argued that rates are just one of the many reasons they fought. June By submitting June Sunnova Energy International Inc. He argued that it reduces government subsidies, inflation and higher interest rates in demand for their equipment – while the latest rates were another obstacle.
Famous sector names, including Sunpower Corp., Lumio and Meyer Burger Technology AG, have also submitted bankruptcy in recent years.
The Sunnova spokesman refused to comment not only on bankruptcy proceedings.
Market watchers say that, depending on how the current D. Trump’s administration is negotiated, the rates could eventually play a much greater role in bankruptcy in the coming months. Recent economic indicators – consumer spending, retail sales, US factory activities – already show demand because of the uncertainty of politics. The number of companies with the highest risk of default is 11 months high, Moody’s Ratings reported earlier this week
However, so far, common damage to companies has been caused. Earlier this month, S&P Global Ratings said that only 31 degree of credit has been linked to rates in recent months, which is less than 1% of all its ratings.
For the time being, some say that if the work had already had plans for the redevelopment, Trump’s tolls could only have been a motivation for bankruptcy earlier.
Some of these “private capital smells, which are proficient in using bankruptcy laws to facilitate the reorganization of the business they want to maintain, but have an unsustainable debt burden,” said Todd Baker, Senior Co -Monteman of Richmond Business, Law and Public Policy Center.
– with the help of Steven Church.
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