By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive says the informal economy is creating a particular challenge for clothing and apparel retailers.
Edison Sumner explained that while many Bahamians are opting to shop online, the trend has also opened up pathways to the informal retailers operating in this nation from their homes or vehicle trunks.
He said: “The informal sector is creating a challenge directly for those in the formal economy, particularly those retailers in the clothing industry having to compete against these informal operators.
“It is an uneven playing field because those in the informal sector do not have a store front, they do not have to pay rent for a building because most times they are selling out of their trunks. Nor do they pay Business License fees and the rest of it.”
Mr Sumner added: “They are bringing products in under the guise of personal use, but the products are being retailed to private clients.
We are all for entrepreneurship, but we would like to see that properly regulated so that those who are paying to be in the industry can truly benefit.”
Mr Sumner said some retailers enjoyed substantial business during the Christmas shopping period, which appeared to have been “robust” based on the level of customer traffic seen.
Some retailers saw a significant portion of their annual revenue generated in the days leading up to Christmas, but the sector’s true performance will likely not be known until companies filed their January VAT returns.
Comments
John 7 years, 3 months ago
And another bites the dust. Women's apparel chain The Limited on Sunday began closing all 250 of its stores across the United States and is slashing 4,000 jobs, the latest casualty of shopping's move online and the growth of fast fashion chains. And just like Chico's, Ann Taylor and other women's apparel stores struggling with big drops in sales, The Limited has been struggling with shifts in consumer behavior and interest, a greater number of rivals and longer store leases.
The informal economy (or underground economy) has always been in operation in The Bahamas. In fact shortly after the Mall at marathon opened, the government sort of gave legitimacy to back trunk and home vendors by allowing them to operate on R.M Bailey park during peak seasons because 'dey only trying to make a living.' But if you drove pass the park this Christmas, you would have noticed that very few vendors had clothing. Most were toys and knock off bags and shoes. That is how brutal the apparel has been, not only here in the Bahamas but worldwide. The ladies fashion stores are suffering and closing doors the most, while a new nieche market seems to have been created for the discount/clearance stores like, Dress for Less, Marshalls, and the other discount stores. Bahamian stores have the odds well stacked against them with the popularity of online shopping, increases in taxes and operating expenses, the lean economy with many people not working in years, the ability and love of Bahamian Shoppers to travel to Miami and New York to shop and the difficulty of doing business in the Bahamas. One would question why clothing items costs more than in the US. A store operator in Miami can order goods from a warehouse or factory and the only thing he pays to get the goods in the store is the cost of the goods plus the freight (which is sometimes included in the price. In addition to what the Miami storekeeper pays, the Bahamian merchant must pay a second set of freight, plus duty, plus vat,plus custom brokerage and trucking fees. So a shirt costing a $6.00 to get in a store in Miami, may cost $10 or $11 to get into a store in The Bahamas, even more if it goes to a Family Island. The Miami merchant does not pay taxes until he sells his goods. Since most taxes, including VAT is paid at the boarder, the Bahamian merchant pays on goods he may not even sell.
John 7 years, 3 months ago
Clothing get outdated and shoes go bad. So he has to factor all of this into his costs. Then the operating costs in the Bahamas are much higher and so yes a shirt that sells in Miami can sell for $17-$18.00 here. But on some brand name items like Clark shoes or other brands there is much price differential so by they time one purchases these items, and bring them here, the price is about the same. The only differrence is because online shoppers do not pay all the costs at once they feel they are beating Nassau's prices. But if Vat had been implemented like it was supposed to and be collected as value is added and customs duties was eliminated at the boarder, it would be much easier to do business here. Imagine car companies having to pay upwards of 80% the first cost of the car to bring it into the Bahamas. And since vehicles are price controlled you can see why so many have closed or are only holding on by a thread.
John 7 years, 3 months ago
"Once a major retailer known for small 2,000 square foot stores selling a limited assortment women's clothing, Limited Stores, founded in 1963 in Columbus, Ohio, fell on hard times in the last decade. The chain was spun off from Victoria's Secret parent L Brands (LB, +0.11%)in 2007 in a leveraged buyout by Sun Capital. In 2010, L Brands, known as Limited Brands until 2013, sold its remaining 25% stake to Sun Capital for roughly $32 million. And its disappearance will likely add pressure to mall operators like Simon Property Group (SPG, -0.49%) and General Growth Properties (GGP, -1.73%), which are grappling with the bankruptcy in the last two years of mall stalwarts like Aéropostale, Pacific Sun, American Apparel and Wet Seal.What's more, mall anchors Macy's (M, -1.17%) and Sears (SOLD) are closing hundreds of stores amid large sales declines."
sheeprunner12 7 years, 3 months ago
We have become like the rest of the Caribbean ......... a junglist, street-smart, bunch of pirates surviving off buying and selling whatever is popular ......... Nassau has lost its sense of cleanliness, order and pride ......... it is as if you are in downtown Kingston or Port-au-Prince now
ohdrap4 7 years, 3 months ago
the apparel retailers have to find other ways to make money.
the degrading of the living standard is evident by what people wear, which is basically tights and camisoles or singlets, outside of work. when you see an older person, he/she will be dressed in a dignified manner, even if they sew their own clothing.
you see that many work places now require uniforms to lower the clothing costs to employees, some even order the clothing at a discount, otherwise they show up with 'half their breasts out'. people should go back to sewing and the govt should help by lowering the duty on materials.
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