Speaking ahead of Sir Richard Branson in an opening keynote at the NRF Big Show in New York Monday, NRF president and CEO Matthew Shay said, not only is disruption permeating the retail sector, but, “disruption has arrived in Washington.”
The very soon-to-be U.S. president Donald Trump has brought a bit of change to the world, and his leadership will have its effect on sourcing and retail for apparel.
“You may like what you see, you may hate what you see, but we all see it,” Shay said, adding, “He’s a businessman and he’s a retailer and so we’re optimistic.”
The retail politician, as Shay dubbed Trump, has proposed a series of tax reforms that the NRF president said will unlock investment and create growth and jobs.
The most talked about change that has been thrown around is what’s being called border adjustment. Put simply, the Republican-proposed tax would eliminate the incentives businesses presently get for moving or locating operations outside of U.S. borders.
A Trump administration could also bring a 10 percent flat tax on imports as Trump tries to follow through on his campaign promise to boost American manufacturing.
If that tax moves forward, it could have quite an effect on retail.
While Shay said there are aspects of the tax reform that could prove positive for retail, the sector won’t be able to absorb all the costs that could come with it.
The costs, Shay said, “can’t be borne by retailers, they are going to be passed on to consumers…and many retailers will find it potentially disastrous.”
He added, however, that “It’s also true that there’s not another industry that’s as enthusiastic as the retail industry about the tax reform.” Retailers, Shay said, pay some of the most taxes across various industries and rarely benefit from any loopholes in the tax code.
“That’s why we are fully supportive of tax reform,” Shay said. “But we need reform that is sensible, that is reasonable and that is ultimately the least disruptive.”
With Trump taking office in just four days, the plan for taxes and retail could come into clearer focus fairly soon if taxes and keeping American jobs are as high up on Trump’s list as he says they are.
“It is all part of living in the new disruptive nation’s capital of Washington, D.C.,” Shay said. “The disruption is something we haven’t seen in decades.”