25% of Retailers Poised To Go Bankrupt

http://clusterstock.alleyinsider.com/2008/12/25-of-retailers-may-go-bankrupt

Retailing has always been a tough business. Now it's a brutal business. Some observers now predict that more than 25% of retailers may go bust in the the next two years.

A great WSJ quote driving home how this truly is retail's Schumpeterian moment:

Analysts estimate that from about 10% to 26% of all retailers are in financial distress and in danger of filing for Chapter 11. AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010. In the previous two years, the firm had estimated 4% to 7% of retailers then tracked were at a high risk for filing.

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which is all of two blocks long (and the only street with retail stores in a very wealthy community), we have lost three retailers in the last week.

Tomorrow, I will decide if I will be the next door to close.

It must be so difficult to go through this.

A business is like a child, isn't it? How long have you owned the business?

Is there any way you can cut hours or other things...instead of closing?

Is their any way of marketing your way out of this? Since you're in a small-town,
could you hit your target market with some cheap advertising or other incentives?

Please keep us posted.

The town is wealthy, but it is broken.

Our Chamber of Commerce sucks. We have what is probably the most marketable small town in America, if not the world. But the Old Guard want no strangers.

...are people living in that small town. The Chamber isn't interested in attracting visitors or
tourists to your town--to spark economic development? If so, that's got to be hard for you. You
probably see a lot of lost potential.

Do you sell product/services that could be positioned as "an escape" or as a "treat" during
tough times? I know you said you've tried everything, and I'm sure you have.

I used to work in PR and sometimes an article in a small-town newspaper can have big impact.
Is it possible that you could get a local reporter to write a story about your business--perhaps
that you are considering shutting your doors? If you banded together with other retailers and
started an organization to help each other survive these tough times--that might be newsworthy
and spark some publicity for your stores and the retail part of your town.

I'm just thinking out loud...

as if we cannot all see for ourselves what it will be

best guesses on what retailers wouldn't make it past April.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4600575#4601438

Pier One
Pet Smart
Fashion Bug
Hooters (sorry guys)
Banana Republic
Caribou Coffee
Talbots
Ann Taylor
Brugger's Bagel Bakery
Lane Bryant
Pottery Barn
The Body Shop
Baby Gap
Eddie Bauer
Bed, Bath & Beyond
Circuit City
Borders
Sears/Kmart
Cheesecake Factory
Coldstone Creamery
Crate & Barrel
Village Inn Restaurants
Numerous, individually-owned Hallmark stores
Cinnabon
Long John Silvers
Burger King
Kentucky Fried Chicken
Fazoli's
Coach House Gifts
Spencer Gifts
Foot Locker
Home Depot
Lowes
Sunglasses Hut
Macy's
Radio Shack
Sharper Image
Toys R Us
Babies R Us
David's Bridal
Swiss Colony Stores
Claire's Jewelry
Zales Jewelry
Kay's Merchandise
American Eagle
Bath and Body Works
Victoria's Secret (sorry fellas!)
The Buckle
General Nutrition Center
Payless Shoes
Build-a-Bear-Workshop
Famous Footwear
Starbuck's
Ethan Allen Furniture
Glamour Shots
Williams Sonoma
Harry & David
Things Remembered
Yankee Candle
Lens Crafters
Pearle Vision
J Crew
Express
The Limited
Limited Too
Rainforest Cafe
Ace Hardware
Journeys
Urban Outfitters
Maurices
Shoe Carnival
Coldwater Creek

...that's just for starters.

come up with your list? Home depot and Lowes going out of business?

However, Home Depot is not doing well. Their Q3 '08 earnings were down 30 percent from Q3 '07. Their stock price was once
around $60 and now is at about $24. Also, the Home-Improvement industry relies on the housing market. The boom, when
construction was gangbusters...is now a bust. My feeling, was that our economy can't sustain so many of these home-improvement
stores, plus Walmart, plus mom and pop hardware stores. Something has to give.

I think any niche store that competes with Walmart is going to have a tough time. Walmart always beats on price, and during
these tough economic times, price will be bottom line for most people. Petsmart is a great company, but they will have a hard
time surviving, due to competition from Walmart, which recently expanded it's pet department. Petsmart only sells pet supplies,
but Walmart can bargain for lower prices and wipe out Petsmart.

I think stores that sell only clothing, shoes, toys, jewelry, sporting goods, music/movies, electronics, or home
decor will suffer greatly. Even grocery stores will have trouble.

It's not going to be pretty.

What was Hooters except a non-nudie nudie bar? What were all those mall specialty food stores but high-priced versions of the old hot dog stand? And who has money to spend on pretentious, "fashonable" clothes when the boss is about to fire you anyway?

Face it. Most of the retailers mentioned were trying to create "niches" for themselves. They weren't providing better products at better prices to anybody. They were trying to promote their image as a way to make people pay higher prices.

I have only bought used CD's and DVD's at mall stores in the last ten years. No clothing (nothing looks good on me) and no hard goods (overpriced crap that won't impress anyone). I wouldn't go out of my way for mall food.

Not only do we need to bring manufacturing back to this country, and to end the Wal-Mart monopoly, we need to teach a new generation of retailers that they must serve a legitimate need and provide good value and service to the public. The old generation of retailers won't do it.

ON EDIT: One final thought. Most of the retailers on the list were in the business of pretense. They were trying to tell the American public that they were smarter, prettier, and hipper than they actually were. And we went with the pretense for a long time. When we start losing our jobs, the truth comes out: we're ugly, stupid and easily manipulated, and we can't lie our way out of it.

....cuz at least twenty five percent of Americans will be bankrupt, as well!


But, can we let these retailers go bankrupt? Couldn't we just all send them all our money so we could at least buy something if we DID have some money? That seems to be the ideology for the banks and auto companies.

So many people don't understand the social costs of shopping at Wal*Mart (lots of DUers, even, say they shop there or somehow sanction others' patronage under the banner of "it's the only place" or "I don't have the money to go to local or independent stores.")

The fact is that Wal*Mart has gone beyond normal supply-and-demand rules within their market areas. They now function almost as a government entity, having bought the trust and good will of the masses and put the independents out of business. All the while waving an American flag and building their own factories in China.

... no telling whether they'll soon be worthless or not.