Here are several excerpts from an interesting article by Joshua Weinberger, Managing Editor of CRM Magazine, The Litany of Retail Woe: 50 Chains Shutting Stores:
A frighteningly long list of retail closures came across the transom during the last few days, and while I haven’t yet fact-checked every point (stay tuned for links, chronology, etc.), I quickly found enough supporting material to merit republishing and amending the list.
The sheer breadth of the damage here is breathtaking. The bloodbath crosses every kind of retail sector, and is clearly not just a reflection of the tough times we’re in, but a harbinger of worse times to come.
Every closed retail location may represent eventual savings for the company involved (after shouldering the actual costs of the close itself, that is), but also represents dozens or even hundreds of out-of-work employees (who are, after all, someone else’s customers), reductions up the supply chain, and rent and taxes removed from that store’s local economy.
In other words, this is bad news with ripple effects that will be felt for months and years to come. (For starters? According to one report, “Consumers will lose $100 million this year on worthless gift cards, from restaurants and stores that have gone belly up.”)
Things don’t look like they’re going to be getting better any time soon given the following news reported in an AP article today…
Consumers nationwide are reeling from job losses, tanking investment portfolios and sinking home values. They are expected to hunker down further in the coming months, making it likely the economy will continue to shrink through the rest of this year and into 2009, more than fulfilling a classic definition of a recession: two straight quarters of economic contraction.”
The Commerce Department’s updated reading on the economy’s performance showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter, weaker than the 0.3 percent rate of decline first estimated a month ago, and the worst showing since the third quarter of 2001.
One has to wonder how online shopping will impact all of this. Maybe the retailers with a strong online selling model will be hurt less then those without one. For the detailed list of planned retail store closures, click here.