Retailing Chains Caught in a Wave of Bankruptcies

[RamboLiberal]

Source: NY Times

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117 and the jeweler Zales will close 100.


Read more: http://www.nytimes.com/2008/04/15/business/15retail.html?_r=1&hp&oref=slogin

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Going to be some vast concrete wastelands!

[Tandalayo_Scheisskopf]

1. Yeah, but...

Think of all the money people will be saving without the temptation to buy shit they don't need!

Man, if Dear Leader makes it out of office without being tarred, feathered and ridden out on a fence rail, it will be his administration's greatest accomplishment.

[BearSquirrel2]

8. The only good that may come of this ...

The only good that may come of this is getting all those stupid home design shows off the air!!!

[Javaman]

9. Yeah, but...

think of all the people that will be out of jobs.

[unkachuck]

2. war....

....and the price of oil is sucking the life out of everything....who would have thought our economic house-of-cards was so fragile?

[Arctic Dave]

3. If the big guys are feeling the pain, it must be excruciating for the niche stores.

[aquart]

5. Maybe...

But our American-made handcrafts store used to notice an uptick when the market crashed. "No Mercedes, no trip to Europe....I must have something to console myself" sales happened a lot.

This one may be different though. First time in my life there was no waiting at my hairdresser. If people on 57th Street are giving up $35 haircuts, things must be very dicey indeed.

[MrModerate]

4. It's pretty clear to me that Sharper Image has been moribund . . .

For at least a decade. Selling totally useless crap for a premium to a shrinking demographic was always a risky business model. The others listed here are either direct victims of the housing bust or indirect victims (their customers were coasting on money from cashing out their equity).

Does that make this any less discomforting? Maybe not. However, it is a bit less dire.

[Skittles]

14. are you kidding?????? nt

[newburgh]

6. Yippee! Just as I start my small town business...

they can't compete with my quality and customer service and convenience anyway, but it's good to see there'll even be less of them. Back to the city from the suburbs- the slums of the near(er) future...

[Digit]

7. While you rejoice in stores closing their doors, that means many are losing their jobs

I work retail, in a mall no less, and I am nervous as hell.
I am 56, and it was difficult enough to get THIS job.

You can count me as one of thousands.

I call this trickle up unemployment.

[Kool Kitty]

11. That's the first thing I thought of.

All these people will be out of work. Damn.

[Skittles]

15. it is indeed a snobby sentiment

I hear you, Digit

[OKthatsIT]

10. I feel sorry for the people losing their jobs

But, we all have to tighten our belts and work at taking back our country. We can get through this if we decide the policies, not the banks. We need to start over. We need a Congress who isn't 'owned'.

... we all have to stop buying 'stuff'.

This year I told everybody "no more presents for me". I really am tired of stuff. It's just more stuff to fuss over or find a place to put...and probably rarely used.

I'm resourceful. I like the challenge of finding used/discarded materials and making something clever with it.

[pokercat999]

18. Have you found:

FREE CYCLE it's a group on Yahoo groups.com that gives away used but still serviceable stuff of just about any type. Anything useful that is destined for the landfill. It's all totally free is meant to be reused recycled, check it out. It is all local chapters.

[tomreedtoon]

12. These stores relied on the Rich and Stupid.

As in Lifestyles of the Rich and Stupid. I have not seen anything in a mall I wanted to buy for the last fifteen years. Some things I had to buy...for presents for people who demanded that particular expensive perfume, perhaps...but nothing I wanted or needed.

I feel sorry for the people who lost their jobs, and even the mall managers who will soon have empty space that no one can afford. I can't blame the clerks, who wanted to get some job, any job. They didn't have a choice.

But the malls, and the franchise corporations, did have a choice. They chose to aim at a supposedly affluent, style-obsessed, STUPID clientele. When that stupid clientele ran out of money, so did their enterprises.

The failure of the malls is a reflection of the failure of the American economy. From making good, sturdy, useful products, the economy switched to frivolous, breakable crap. And as the malls go out of business, so will the rest of America.

[Jeff_The_Man]

13. So...

Why did these stores not have any surplus profits for these emergencies?

[Skittles]

16. um....Jeff?

maybe they did - but like a lot of people, eventually you just fucking run out WHEN THE ECONOMY IS CRASHING

[defendandprotect]

17. Capitalism isn't about competition --- it's about killing the competition . . .

and more and more Americans have fewer choices and no choices ---

[Winterblues]

19. I suspect wholesalers are beginning to feel the heat as well

If Retailers shut down wholesalers have no noe to sell their stuff to..It is going to get much worse before it gets better just as Nader said it would...We have a Democratic Majority and it still is going to get worse and worse because they fail to understand the underlying principles of integrity and honor. If we allow thugs to run our country the Thugs will run the country and since that became the case people have zero confidence..Democrats must shoulder their fair share of blame here. No accountability no confidence as simple as that...

[cliss]

20. I think this is just the beginning.

About 1 month ago, there was an article in the Oregonian. The article said that "in the next 90 days, we should expect to see an unprecedented number of bankruptcies from retailers".

[rcsl1998]

21. K&R