Some Retailers See Setbacks From Silicon Valley Bank Collapse
Some retail organizations are seeing significant setbacks as a result of the collapse of Silicon Valley Bank (SVB). Toy e-commerce startup Camp, for example, sent an email to customers on March 10 that said it was slashing prices and would use the sales to help fund its continued operations after much of its money was tied up in the bank failure, according to a CNN report. In the email, from Camp Co-Founder Ben Kaufman, customers were asked to use the code “BANKRUN” to save 40 percent on all merchandise. Camp also said customers could pay full price, which it said would be appreciated. The move was aimed at helping Camp generate enough cash to maintain operations until it regained access to the money it had kept with the now-defunct SVB.
Additionally, Etsy reportedly warned some of its sellers that their scheduled deposits may be delayed, according to a CNBC report. The marketplace worked with SVB to handle payments made to its users and is now working with other payment providers to issue outstanding deposits.
“We know that you count on us to help run your business and we understand how important it is for you to receive your funds when you need them,” said Etsy in an email seen by CNBC. “Please know that our teams are working hard to resolve this issue and send you your funds as quickly as possible.”
Total Retail's Take: While it's clear that SVB’s collapse is creating some short-term challenges, it's unclear what the full effect of the crisis will be. One thing is sure, however: The Department of the Treasury, Federal Reserve and FDIC are working to minimize the disruption, and confirmed late on March 12 in a statement that “[d]epositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
In addition, other retailers aren't anticipating major problems stemming from the downfall of SVB. Poshmark, for example, said the SVB fallout would have no impact on its users. “I want to assure everyone in our seller community that all accounts on Poshmark continue to be safe and secure,” said John McDonald, chief operating officer, Poshmark, in a statement. “We do not use SVB to store customer or marketplace funds, and your ability to process payments and redemptions is not affected.”
Melissa Campanelli is Editor-in-Chief of Total Retail. She is an industry veteran, having covered all aspects of retail, tech, digital, e-commerce, and marketing over the past 20 years. Melissa is also the co-founder of the Women in Retail Leadership Circle.