From Daily Finance:
Your next shopping trip may not be as convenient as it used to be. The second quarter earnings season brought news from several major retailers that they will be shutting down stores. Both Saks and Abercrombie & Fitch said they were closing stores in several parts of the country. Meanwhile, other stores like the struggling Blockbuster video rental chain, continue to slash stores by the dozens. American Apparel, which is close to defaulting on its loans, just may be next.
Consumers just aren’t shopping the way they used to. Even Wal-Mart Stores, which typically fares well during tough economic times, is worried. “The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending,” said president and CEO Mike Duke in a statement that was released during the company’s second quarter earnings report….
Not exactly the sort of news one wants to hear 3 months in front of the big shopping season – anyone want to take bets on whether this Christmas will be a financial bust? Might be we’ll have to get back to treating Christmas as, well, Christmas…all that God and hope for the world stuff we’ve put in the backseat in favor of new toys.
If you go to the linked article, you’ll see that this is not juts a few stores – Blockbuster is on path to close about 500 stores, while Abercrombie and Fitch will close about 100. How many people work in each store? 20? I don’t know – never really worked retail so I don’t know staffing levels…but its going to be a lot of people, and it is a sign of the continued contraction of the economy. And less retail outfits means lower levels of stock – less orders for factories; this is both a sign of how bad things are and a signal of how bad they might become.
As I’ve said, only a complete re-working of our economy towards wealth creation will get us out of this – people aren’t going to be able to fuel growth by putting it on the credit card, national or personal.
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