When Silicon Valley Bank collapsed on Friday, it sent a shockwave through a variety of industries, including retail.
The Federal Deposit Insurance Corp. announced Friday that the startup and tech-focused firm closed and its deposits were taken over by regulators. This came just two days after SVB announced it lost about $2 billion in the sale of U.S. treasuries and mortgage-backed securities — a move that stemmed from mounting declines in deposits. After the company said it planned to sell stock in order to raise around $2.25 billion in capital, its stock price tumbled and worried clients began rushing to withdraw their funds.
SVB works with clients ranging from tech companies to the wine industry to consumer-packaged goods brands. It also has a venture capital arm, making it a well-known name in the startup community.
Within retail, some brands rushed to inform customers and shareholders of whether or not the collapse had a material impact on them.
DTC health and wellness company Hims & Hers said in a Friday press release that it had a “limited cash exposure resulting from the liquidity concerns at SVB.” The company assured that a majority of its cash and investments were with other providers, and it does not have any debts or lines of credit impacted by the collapse.
Meanwhile, CEO Tobi Lütke at e-commerce giant Shopify took to Twitter to say that the company was experiencing a “very minor impact” from the news, noting that a small portion of its U.S. operational fund flows is tied up in SVB. SVB is one of about a dozen banks Spotify works with across the U.S. and Canada, Lütke said.
Lütke shared an email Shopify sent to merchants on Monday that offered to help fund merchants’ payroll needs by working to set up accounts for them. “Building a business is hard. This week has been insanely hard,” Shopify’s COO Kaz Nejatian said in the email.
While the U.S. Treasury, Federal Reserve and FDIC announced Sunday evening that depositors would have access to their accounts starting Monday, the weekend largely brought up concern from brands who weren’t sure what would happen to their money given the collapse. Confidence in other banks may be declining as well, with Signature Bank also being closed on Sunday and handed over to regulators, per the government’s statement.
Here’s a look at what companies were impacted and how they responded to the news.
Omsom
After the SVB news broke, venture-backed CPG brand Omsom took to Instagram to inform customers of the impact.
Omsom — which sells cooking starter packs featuring Asian flavors — said in a post on Friday that it had all of its capital in an SVB account.
“This poses a major existential threat to many small businesses,” the company said, adding a call to action for customers to support the company by stocking up on products and gift cards, as well as sharing the post.
Since Friday, the brand updated the caption of its Instagram post to note that depositors will now have access to its funds starting Monday, but that it “won’t breathe easy until we have access to our funds.”
“Our focus now is how can we prevent this in the future and how can we continue to show up for our amazing community, our ride or dies,” Omsom co-founder and CEO Vanessa Pham told Retail Dive via email. “It’s a common misconception that what happened with SVB only poses a threat to big tech … We’re doing our due diligence with investors and advisors to land on the most prudent plan to store our funds — this will include working with established, reputable banks and diversifying where we’re storing funds.”
Slumberkins
For DTC children’s brand Slumberkins, the SVB collapse pushed the brand to offer a special deal for customers.
Over the weekend on Instagram, the book and toy animal brand said that “the majority of our company’s cash was held at Silicon Valley Bank.”
Slumberkins launched a 40% off sale for its entire website to help it “forge through this moment,” and it updated the post’s caption a day later to say it had sold out of most of its books and toys thanks to the support.
Camp
With a sense of humor about the serious situation, the children’s brand Camp posted on its social media about the impact SVB had on it.
A company Instagram post over the weekend posted a meme that read “when your bank collapses,” featuring a somewhat sad-looking child.
An Instagram post from Camp on March 10, 2023.
Screenshot: Camp/Instagram
Using the promotional code “bankrun,” customers could get 40% off sitewide.
“Our bank got shut down by regulators, so we’re asking that you RUN, don’t walk to our BANKRUN sale,” the company said in the post.
The brand describes itself as a family experience company and has nine retail locations selling shows and merchandise, according to its website.
Universal Standard
Inclusive sizing apparel brand Universal Standard also offered a deal to customers in exchange for support over the weekend.
The brand emailed customers on Saturday to say that it was “facing unexpected hurdles due to the shut down of our bank, Silicon Valley Bank.”
Anyone who shopped on the brand’s website over the weekend received a discount code for an event the company is holding on March 19.
“We’ll admit: This is all a little surreal,” Universal Standard’s email said. “And while we’re not exactly sure what’s on the road ahead, we’re confident we can handle a few bumps and continue to serve our incredible community.”
Stitch Fix
E-commerce retailer Stitch Fix on Monday submitted a filing to the Securities and Exchange Commission that expressed its relationship with SVB.
The company said it is party to an amended and restated credit agreement with SVB along with JPMorgan Chase and Citibank to provide a revolving credit line of up to $100 million. SVB’s commitment is $40 million, per the filing.
Stitch Fix noted that it does not expect the $40 million to be available anymore, but it also does not plan to draw from the credit agreement. Its remaining borrowing available and other cash “will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months and beyond.”
Etsy
Independent sellers who work through online marketplaces have also been impacted.
Etsy over the weekend said in a community forum post that it experienced a delay in payments to some sellers that was “related to the rapid and unexpected collapse of Silicon Valley Bank.”
“This issue has impacted a small group of sellers,” an Etsy spokesperson told Retail Dive in an emailed statement Monday. “Approximately 0.5% of our active seller base had their payments delayed on Friday. We are working to pay these sellers today and we’ve already started processing payments via another payment partner this morning.”
Faire
Faire — an online wholesale marketplace that connects independent sellers to businesses — also updated its community about potential deposit delays due to the SVB collapse.
Faire CEO Max Rhodes said in an email to sellers on Friday that while it previously worked with SVB, it decided to switch to working with JPMorgan Chase as its primary partner.
“Faire’s financial position and ability to partner with your business have not been impacted by the events of the last week,” Rhodes said in an email a seller forwarded to Retail Dive. “Out of an abundance of caution, on Monday we will also begin reissuing any payments we suspect may not have been received last week.”
Rhodes added that “Silicon Valley Bank has been a major partner to entrepreneurs over the years – many of the impacted depositors are small businesses, startups, and people pursuing their dreams.”
