Barrons News | Etsy and other retailers weigh in on SVB collapse

Barrons News Etsy and other retailers weigh in on SVB collapse wsjrenewal

The government’s actions mean that the risk to companies with funds stashed in SVB will be minimal said Barrons News, but that hasn’t prevented investors from fretting over the fallout.

Retail was slow to join the technology bull run that dominated the early 2010s. That means the sector has less exposure to SVB, which largely catered to tech start-ups. But less exposure doesn’t mean none at all, especially because the past few years saw a bump in public offerings from a wave of technology-focused retailers.

“We believe the risk to our coverage, however, extends beyond having cash
deposited with SVB,” wrote D.A. Davidson analyst Tom Forte in a research note. “For example, one or more of our covered companies may generate meaningful advertising revenue from startups that were adversely affected by the bank’s closure.”

It is too early to speculate which companies will be impacted by SVB’s closure, Forte added, but Barron’s compiled a list of those that have already provided an update.

Stitch Fix (ticker: SFIX)

On Monday, online personal styling company Stitch Fix SFIX +4.63% said it no longer expects a $40 million revolving credit commitment from Silicon Valley Bank. The $40 million was part of a broader $100 million credit agreement with SVB, JPMorgan Chase JPM –1.62% , and Citibank. It still has $60 million available from the two other lenders and has no current plans to draw on the agreement, Stitch Fix said to Barrons News, in a filing on Monday.

The company reaffirmed that its current cash, investment balances, and borrowing available will be enough for working capital for the next 12 months.

Companies relying on SVB for capital, such as Stitch Fix, will likely be hurt the most by SVB’s closure. While the government will ensure clients who had deposits in the bank get their funds back, there has been no announcement on what will happen with borrowers.

Etsy (ETSY)

About 0.5% of Etsy ETSY –2.03% ‘s seller base had their payments delayed on Friday, the company said in an email to Barron’s. The company was working to process payments through another partner on Monday. It does not expect the delay to have an impact on its quarter ending in March, Etsy said to Barrons News.

Shopify (SHOP)

The closure had a “very minor impact” on Shopify , said CEO Tobi Lutke in a tweet over the weekend. SVB was one of roughly 12 banks the company uses to process payments, spread across the U.S. and Canada, Lutke wrote. “A small portion of our US operational fund flows is tied up in SVB but we are working around it and it should be business as usual,” he added.


Poshmark does not use SVB to store customer or marketplace funds, the company said in a statement on Saturday, meaning that vendors’ ability to process payments was not affected.“I want to assure everyone in our seller community that all accounts on Poshmark continue to be safe and secure,” said John McDonald, Poshmark chief operating officer, in a statement.

They didn’t clarify whether it used the bank for other purposes outside of vendor transactions. The company was recently sold to South Korean internet giant Naver for $1.2 billion.

Rent the Runway (RENT)

Online clothing rental company Rent the Runway (RENT) has no exposure to SVB, a company spokeswoman confirmed over email.

Allbirds (BIRD)

The shoe company, headquartered in San Francisco, does not hold any cash deposits at SVB nor does it have a banking relationship with SVB, a spokesperson confirmed over email.

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