Fallout begins after dismal holiday season!

[Dantheman62]

AP
Fallout begins after dismal holiday season
Monday December 29, 8:29 pm ET
By Anne D'Innocenzio, AP Retail Writer
Fallout begins after dismal holiday season with bankruptcy filing of online toy seller


NEW YORK (AP) -- The fallout from the horrific holiday season for retailers has begun, with the operator of an online toy seller filing for bankruptcy protection and more stores expected to do the same -- meaning more empty storefronts and fewer brands on store shelves.

A rash of store closings, which some experts predict will be the most in 35 years, is likely to cut across areas from electronics to apparel, shrinking the industry and leading to fewer niche players and suppliers.

The most dramatic pullback in consumer spending in decades could transform the retail landscape, as thousands of stores and whole malls close down. And analysts expect prolonged woes in the industry as the dramatic changes in shopping behavior could linger for another two or three years amid worries about the deteriorating economy and rising layoffs.

"You are going to see a substantial retrenchment in the retail industry," said Rick Chesley, partner in the global bankruptcy and restructuring group at international law firm Paul Hastings. "The downturn has been catastrophic."

A number of stores couldn't even make it to Christmas. Circuit City Stores Inc. filed for bankruptcy protection last month. It plans to keep operating, but toy seller KB Toys, which filed for bankruptcy earlier this month, is liquidating its stores and will shut down.

The survival prospects for many more stores are dimming as more sales data comes in about the crucial holiday shopping season, which can account for up to 40 percent of a retailer's annual profit.

Holiday sales fell from 2 percent to 4 percent compared to a year ago, according to SpendingPulse, a division of MasterCard Advisors. Excluding gas and car sales, they dropped between 5.5 percent and 8 percent from Nov. 1 through Dec. 24, as key categories from luxury to electronics posted double-digit sales declines. Sales of electronics and appliances fell almost 27 percent, for example.

ShopperTrak RCT Corp. which tracks retail sales and customer traffic at more than 50,000 outlets, said Monday that it now expects foot traffic to be down 16 percent and sales to decline 2.3 percent for the November and December period.

The retail casualties, which were first among home furnishing stores and then many apparel stores over the past year or so, are expected to cut across all sectors as shoppers have slashed their spending on nonessentials, from TVs to jewelry.

About 160,000 stores will have closed this year and 200,000 more could shutter next year, said Burt P. Flickinger III, managing director of consulting firm Strategic Resource Group. That would be the industry's biggest contraction in 35 years. In March and April of next year, Flickinger expects 2,000 to 3,000 malls to shutter.


For the rest of the article..
http://biz.yahoo.com/ap/081229/holiday_fallout.html

[Humble Janitor]

Good. Who has time and money for worthless junk?

Hard times makes you appreciate whatever you've got and why buy more?

[Dantheman62]

Yup and this is just the start!

[Dantheman62]

NEW YORK – Consumer confidence hit an all-time low in December, dropping unexpectedly in the face of layoffs and deteriorating markets for housing, stocks and other investments.

The Conference Board's Consumer Confidence Index fell to 38 in December from a revised 44.7 in November. Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.

The separate Present Situation index, which measures how respondents feel about business conditions and employment prospects, fell to 29.4 in December from 42.3 in November. It is now close to levels last seen after the 1990-1991 recession.

"Deepening job insecurity and falling asset prices are outweighing any optimism consumers may have derived from falling gas prices," said Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort.

The unemployment rate hit a 15-year high of 6.7 percent in November and economists expect additional job losses in the first half of 2009.

In the Conference Board survey, those saying jobs are "hard to get" rose to 42 percent in December from 37.1 percent in November, while those claiming jobs are "plentiful" decreased to 6.2 percent from 8.7 percent.

The proportion of consumers anticipating an increase in their incomes decreased to 12.7 percent in December from 13.1 percent in November.

Those claiming business conditions are "bad" increased to 46.0 percent in December from 40.6 percent in November, while those saying business conditions are "good" declined to 7.7 percent from 10.1 percent.

[Humble Janitor]

It doesn't matter how many polls they do! The **** is going to hit the fan and no amount of sugarcoating will mask it!

[Lunaris]

away with the junk!!!

here here!

yay!

[Northern Boy]

predictions are that roughly 25 % of all retailers will not be around by the summer you shouls get some picture of what will happen as they are calling 2009 the year of the Wall street bloodbath

[Jacqui D]

The Uk is also failing badly with another 100 stores as possible closures.
I'm a child from the 50's and i have never seen anything so bad.
Perhaps the day of rationing will come back we will have to wait and see.
Vegetables and fruit are going up in the next few weeks with much more i fear.
We have been warned of possible gas and electric cuts or pressure drops, we already have less pressure during peak cooking hours.
Noticed the other evening our electric lights were dimming almost going out then coming back on less powerful so they are definately lowering the wattage.

Just be prepared everyone then it won't be such a shock when these things really hit!

[Carol]

We actually got our daughter a sewing kit with a little sewing machine and legos for Christmas. She loved them. That was it.

We sent the relatives (children) gift certificates so they could buy what they wanted... it saved us a bundle on postage. And we gave money to the adult children. In addition, I did not go into one store to shop this year as everything was purchased on-line. Saved me money on gas and time. Next year, I'll most likely order everything through Amazon as they wrap and deliver.

Due to on-line shopping and what the gas companies did by gouging us at the pumps, and folks losing their jobs, many stores are becoming obsolete.

[She-Ra]

I've seen a list on the board which had names of stores/companies in the US that are likely to go into bankruptcy or close stores in 2009 but I was wondering if anybody has any information on companies in other countries, especially international or parent companies? For example, it's been reported in the UK mainstream media that 15 major national companies are facing bankruptcy but obviously they are not mentioning names, however it has been said that it will be 'eye opening'.

[Dantheman62]

The list you are talking about that you saw was an email that somebody got and posted, I've checked about 4 pages of sites just now in Yahoo and couldn't find any info on companies going bankrupt in the UK, some sites had lists but you had to join the site to get the list.

[She-Ra]

Wedgewood have called in the Administrators - I initially found that surprising but then they are a luxury brand, but then they've been made even more popular with all the antiques/lifestyle programs and at Xmas they are given as gifts but they're not really practical - so many buts!

http://money.uk.msn.com/investing/ne...entid=12486656