Holiday Sales Slump to Force U.S. Store Closings, Bankruptcies

Heather Burke
Bloomberg
Monday, Dec 29, 2008

U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers will close 12,000 stores in 2009, according to Howard Davidowitz, chairman of retail consulting and investment- banking firm Davidowitz & Associates Inc. in New York. AnnTaylor Stores Corp., Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. The holiday results indicate possible consolidation and further bankruptcy filings, according to Gilbert Harrison, chief executive officer of retail advisory firm Financo Inc.

“You’re going to see deals that you never thought you were going to see before because of the necessity of both parties,” Harrison said in a Bloomberg Television interview Dec. 26.

Sales at stores open at least a year probably dropped as much as 2 percent in November and December, the International Council of Shopping Centers said last week, more than the previously projected 1 percent decline. That would be largest drop since at least 1969, when the New York-based trade group started tracking data. Many retailers will report December results on Jan. 8.

Consumers spent at least 20 percent less on women’s clothing, electronics and jewelry during November and December, according to data from SpendingPulse.

Retail Metrics Inc.’s December comparable-store sales index will drop an estimated 1.2 percent, or 5 percent excluding Wal- Mart Stores Inc. Retailers’ fourth-quarter earnings may fall 19 percent on average, the seventh consecutive quarterly decline, according to Ken Perkins, president of Retail Metrics, a Swampscott, Massachusetts-based consulting firm.

Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said this month during a panel discussion held at Bloomberg LP’s New York offices. Only retailers with healthy balance sheets will survive the recession, according to Matthew Katz, a managing director at consulting firm AlixPartners LLP.

Store Closings

About 200,000 stores may close in 2009, compared with a record 160,000 in 2008, Flickinger said.

The U.S. economy shrank in the third quarter at a 0.5 percent annual pace, the worst since 2001, according to the Commerce Department. Economists surveyed by Bloomberg in the first week of December forecast the world’s largest economy will contract through the first half of 2009.

The Standard & Poor’s 500 Retailing Index shed 34 percent this year before today, with only two of its 27 companies rising.

The index doesn’t include Wal-Mart, the world’s largest retailer, which fell 21 cents to $55.14 at 9:58 a.m. in New York Stock Exchange composite trading. Wal-Mart shares gained 16 percent this year through Dec. 26.

“If you’re going to be in retail right now, the discount space is where you want to be,” Patrick McKeever, a senior equity analyst at MKM Partners LLC, said today in a Bloomberg Television interview.

Discount Advantage

Discounts of 70 percent off or more by Macy’s, AnnTaylor Stores Inc. and other retailers failed to prevent a spending drop of as much as 4 percent during the final two months of the year, according to data from SpendingPulse. Consumers are trained for sales, according to Patti Freeman Evans, an analyst at Jupiter Research in New York.

“The situation is not going to right itself in January; it’s going to be a long while that discounting’s going to be around,” said Evans. “Consumers are going to get used to it and it’s going to very difficult for retailers to move forward in a full-price mode.”

Retail bankruptcies may help the industry in the long run, according to Flickinger.

“We’ll be going from a ****ens-esque worst of times this December to the best of times in future Decembers because we’ll rationalize out all the redundant retailers and retail space in shopping centers,” Flickinger said.

It's all related. Trade tariffs were lifted causing a rush of cheap goods to flood the country. Americans were able to shop, shop, shop. Stores opened left and right.
Soon American companies could not compete with the prices of cheap goods made by companies with cheaper labor, few environmental regulations, and safety rules.
The American companies began outsourcing American jobs in favor of cheaper labor markets. Soon Americans were forced into the service industries for less wages. The system began to balance out and we soon found ourselves with inexpensive goods and less money to buy them.
Other countries find themselves with better wages and the market will shift.
Globalization my friend. For it to work the wealthy countries must decline in wealth so that the poorer countries can rise.
Everything you see today is a direct result of globalization and it isn't over for America. We still have some falling to do. The only winners are the wealthy corporations. Most American, who have sold us out for greed.

At first there was room for more retailers. They were able to open to absorb the extra money Americans found themselves with when prices were suddenly real cheap. Instead of one TV they could suddenly buy two or three with the same amount of money. Instead of one car they could now park two or three in their driveway, and a new one every two years or so.
Now with good paying manufacturing jobs gone, so is the money. There is no room for so many retailers.
Its all related.
Its all balancing out. Its all Globalization!

For Globalization to work. Americans have to be brought down a bunch of pegs on the ladder. The dollar must fall.
One world, one economy, one currency, One Government!

Do you know what is weird? many americans are cheering for wages to drop. Years of anti union propaganda are paying off. Instead of people hopeing to make more they are hopeing others make less.

All you have to do is read what gets snatched out of Bilderberg to know that this is all being manipulated to bring about the one worlders plans.

Then there is this:

IBM human inplantable RFID chips will track and monitor the population

IBM calls it the smart chip a tiny computer that will have a broad range of application for retail, logistics and tracking. Known at IBM headquarters as the “Smart Machines Initiative” these powerful chips can monitor human performance, track your movements and enhance security.

IBM has plans to sell the equipment necessary to read and track the chips to private business and government as part of their eBusiness marketing program.

Video: Commercial promoting the chipping of human beings produced for IBM.

http://www.youtube.com/watch?v=44f5A8PCWiU&eurl=http://www.dailynewscaster.com/&feature=player_embedded

Did you know IBM helped the NAZI’s more efficiently run concentration camps?

Will those who refuse the human implantable chip be considered the New Jew and sent to concentration camps for reeducation or worse the final solution?

Video: Compilation of news stories promoting the use of the human implantable chip.

http://www.youtube.com/watch?v=y3Qq0FFZHOI&eurl=http://www.dailynewscaster.com/&feature=player_embedded

VeriChip is currently manufacturing RFID devices for people you can visit the site HERE.

http://www.verichipcorp.com/