"Get Ready for Mass Retail Closings"

[sk!mom]

Wow that's a bit offensive to those that live in Minnesota...there are plenty of wealthy people that live in Minnesota, ever heard of the Mayo Clinic, 3M, Best Buy, General Mills or Northwest Airlines? Not to mention we have one of the largest malls on the country, and we like sparkly things too.

If you're offended, then I think you're missing the point.

IMO- The point is- many businesses overexpanded in boom times and now cannot support the debt taken on during the expansion. It really has nothing to do with whether or not there are people in the new areas who can afford to shop. Of course there are, that's why it seemed like a good idea.

In the case of a business like Tiffanys, they also may have made there brand less exclusive and coveted by making it so accessible. A part of their success was built on being exclusive. I know that on our trips to NYC a stop at Tiffany's is no longer as big a deal since we can visit the store in San Antonio.

 

[crisi]

If you're offended, then I think you're missing the point.

IMO- The point is- many businesses overexpanded in boom times and now cannot support the debt taken on during the expansion.

In the case of a business like Tiffanys, they also may have made there brand less exclusive and coveted by making it so accessible. A part of their success was built on being exclusive. I know that on our trips to NYC a stop at Tiffany's is no longer as big a deal since we can visit the store in San Antonio.

That's pretty much it. Things that used to be luxury items for the wealthy became items easily possessed by the upper middle class - or even the middle class in a brand expansion. That isn't supportable in this economy, and in a lot of cases, the debt taken on by the company to finance the expansion of their brand is sitting on their balance sheets. Now they have a diluted brand that no longer screams "wealth and privilege," a smaller market, and a balance sheet built around a cash flow assumption that is now a pipe dream.

Large retailers with strong balance sheets and little debt will have to cut costs - which may mean closing some stores, laying off people, etc. Companies carrying a lot of debt - particularly short term debt obligations - are in a world of hurt - if their debt obligations are significant and based on 2007 cash flow assumptions, they won't be able to make payments - and may not be able to find new money. Circuit City had been losing money for years - but it was always able to find someone willing to give them money. It wasn't until their debt came due and this time there wasn't a willing investor or lender that they went under.

 

[Poohbug]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

And I live in a city that just had a GM plant close and the supporting business for the GM plant close. I have not noticed any shorter lines in the grocery store, Walmart, mall stores, etc.

As mentioned before just because a business files for chapter 11 does not mean that it will close. I do expect the amount of retail stores will go down. It is just ridiculous to have two or three of the same stores within a few miles of each other.

 

[ruadisneyfan2]

DH and I were explaining that to DD the other day, that not even very long ago people didn't have the volume of clothing and things that they do now. Things were worn or used til they were no longer functional or repairable. It was only for the very wealthy to have closets and dressers stuffed to the brim with clothes- "normal people" like us would have never been in that position. I wonder when and how the values shifted towards where we are now

I thought this, not about clothing so much, but just "stuff" in general.

How our CVS is taking up a building that once was our Shop n Bag (grocery store) when I was kid. Do they really need to sell everything? Food, milk, clothing, toys, cameras, anything to make a buck.
They want to be everything to everyone.

My mom recently returned from a cruise and in Tortola stopped at a pharmacy to get my dad some cream for his itchy feet. She noticed that the pharmacy only sold medication and how the pharmacist came out to help her find what she needed. She was taken aback by how simple the whole store was and reminded her of her childhood.
Those days are def over in the US.

 

[BlakeNJ]

Sears is a definite, they are trying there best, but it was just on tv the other night. Sears believes that they are going to have to file Chapter 11 soon.

Macys filed Chapt. 11 years ago and there are still hundreds of Macys stores open in the US. I don't think we'll see any of the stores listed closing before years end.

 

[kwhite1022]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

Pretty much. I know several shopaholics who still go to mall to feel like they are still part of that lifestyle, but no longer come home with shopping bags full. They want to pretend nothing has changed, but when you see how crowded the halls are, and not a person inside an actual store, you figure it out real quick.

 

[crisi]

Macys filed Chapt. 11 years ago and there are still hundreds of Macys stores open in the US. I don't think we'll see any of the stores listed closing before years end.

Macy's filed Chapter 11 in a different economy. It is possible to file bankruptcy and come out of it and form into a viable company - its why we allow Chapter 11 to start with. But its going to be harder right now for companies to manage to do that. Some will manage it, some will not.

 

[bavaria]

DH and I were explaining that to DD the other day, that not even very long ago people didn't have the volume of clothing and things that they do now. Things were worn or used til they were no longer functional or repairable. It was only for the very wealthy to have closets and dressers stuffed to the brim with clothes- "normal people" like us would have never been in that position. I wonder when and how the values shifted towards where we are now

I often buy new clothing at Talbots for $10 or $15 and that is just WRONG. Nobody is making any money off it, and I do feel guilty for perpetuating a broken system.

I refuse to shop at Old Navy or other stores which regularly underprice their clothes but I will look for sales on quality clothing at Talbots or Macys etc. But I still don't think that it is right that I have a massive amount of stylish, quality clothing purchased for $10-20. I'm part of the problem for buying it.

In Europe sales are twice a year and we pay dearly for things - even the things that are 'German' or 'French' sell for far less in America. Something just isn't right, but to change habits takes a long time. People will be in shock if they can no longer get those clothes for that cost and have to pay full price with few sales. The shops cannot start doing that unless they ALL do it, or the higher priced ones will fail.

 

[NotUrsula]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

Yep. We do it all the time this time of year; it's a way to get some exercise and get out of the house without having to deal with gearing up the children for the cold weather. We walk around in the mall itself and perhaps get something to eat, but usually do not enter any of the stores. My sister sent me a Dillard's gift card for my birthday this year, and when I went to try to spend it I realized that it had literally been years since I have actually shopped inside a mall department store. I might walk through from the parking garage, but I never stop and browse. I do 95% of that sort of shopping online now; the only b&m stores that I normally go to are supermarkets and gen'l merchandise stores like Wal-Mart and Target when I need things like trash bags or a toy for a birthday party.

Before 9/11 we used to go to the airport in winter for exercise, too; you could walk two miles along the interconnected concourses and do some interesting people-watching along the way.

What can I say? -- I'm frugal, and I always have been.

 

[cats mom]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

And I live in a city that just had a GM plant close and the supporting business for the GM plant close. I have not noticed any shorter lines in the grocery store, Walmart, mall stores, etc.

I feel the same way. I saw the thread asking how the economic slow down is affecting different areas and I didn't quite know how to answer.

Every time I've stopped at the mall since the first of the year I've been shocked at how busy it's been. And I guarantee people are not just walking around, they're definitely buying. Granted, I live in the land of conspicuous consumption... but I still keep expecting to see more signs of a slow down, and so far I haven't.

A few stores in the mall closed after Christmas, but replacements have been found for all of them and will be opening soon, if they haven't already. The one vacant space in the little retail center near my house was just filled with a high end cookie and cake store that definitely caters to the disposable income crowd. I swear people are doing their part to keep the luxury auto dealerships going too. Of course I'm sure the high end ride would be the last thing many folks around here would give up... can you say car culture?

That said, Linens n Things and Circuit City were in the same strip mall, so I'll be keeping my eye on that location.

 

[clutter]

Every time I've stopped at the mall since the first of the year I've been shocked at how busy it's been. And I guarantee people are not just walking around, they're definitely buying. Granted, I live in the land of conspicuous consumption... but I still keep expecting to see more signs of a slow down, and so far I haven't.

Yet I live in an allegedly 'recession proof' area. My dd and I went to the mall the other night at around 8pm (weeknight). I could have rolled a bowling ball from one end to the other and I would not have had to yell "Fore!" It was that empty. I think that what a lot of people are seeing is that weekend traffic is still up, but weekdays are down.

My boss goes out to eat on Saturdays and says 'what recession'. I go out during the week and see empty restaurants all over the place. We were at CarMax on Tuesday and Thursday nights. Ghost town.

Crisi is right. This is not a matter of sales, especially if you're only seeing your local area. It is a matter of how retailers financed their expansions (and remember just a few years ago, they were penalized by Wall Street if they weren't expanding enough!). What people do not understand is that there is little to no credit available out there. And while we may see that 'rates' are down, banks are increasing their spreads (the amount they charge over a base rate such as LIBOR) by hundreds of basis points. So while LIBOR may be down, credit, if you can find it, is actually costing more.

 

[LilyWDW]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

Yes...

I store I work for is in a big shopping strip off of a major highway. Our traffic is UP over the past year, but our conversion (number of people buying vs overall traffic) is DOWN. People are still out and about, but not as many people are buying.

 

[Foladar]

Sears
JCPenneys?
I can't believe these two.

I could see Sears .. but Penneys? doubt it. They even opened two here recently.

 

[hoosiergirl7]

Didn't read through all the posts but I think there are several problems.

1. There are way too many locations for many stores in this country. These businesses have built up too many retail locations and those that aren't doing well are dragging the company down due to poor performance. Close them! If it means someone has to drive 5 or 10 minutes farther so be it.

2. There is a huge trend moving away from mall shopping. I myself hate going to the mall and would rather go to an outdoor shopping setting. If I need to run into Victoria's Secret I can without having to schlep through the mall to get there. Gymboree, Gap, other stores, same thing. I can park my car in front of the store, run in and come back out. This is the kind of shopping I and many of those I know like. Dragging yourself through the mall is no fun.

 

[mommyof2princesses]

I keep hearing about retail woes yet I can't find a parking space at the mall on the weekend. Are these people just walking around and not buying anything??

And I live in a city that just had a GM plant close and the supporting business for the GM plant close. I have not noticed any shorter lines in the grocery store, Walmart, mall stores, etc.

As mentioned before just because a business files for chapter 11 does not mean that it will close. I do expect the amount of retail stores will go down. It is just ridiculous to have two or three of the same stores within a few miles of each other.

Our mall has been packed on the weekends, but I think that will let up once people spend all of their refund money. I work in a store in our mall and Mon-fri we are making no money at all. Our conversion is sad and the amount of money people are spending is very low. I have noticed a lot of HR Block credit cards coming through. It will be interesting to see what happens in a month or two when all that refund money is spent.

Also, I agree about how many stores are being buil so close together. 1 mile from my house is a CVS and a Rite Aid. another mile there is a Walgreens and another Ride Aid. There are too many store around.

 

[maggiew]

My boss goes out to eat on Saturdays and says 'what recession'. I go out during the week and see empty restaurants all over the place. We were at CarMax on Tuesday and Thursday nights. Ghost town.

We went to eat at Fridays last night (Thursday) and we had to wait 15 minutes for a table! We were shocked. It was around 7 pm.

Maggie

 

[disney1990]

Yes...

I store I work for is in a big shopping strip off of a major highway. Our traffic is UP over the past year, but our conversion (number of people buying vs overall traffic) is DOWN. People are still out and about, but not as many people are buying.

I'll second this. My DH and I went to the mall today for about 2 hours. We went in and our of stores "looking". We didn't buy anything.

As far as waiting for 15 minutes for a table at a restaurant, in the Maryland/DC area, 15 minutes would be great. I can remember wait times for 1 to 1-1/2 hours for a seat. That just isn't happening now.

 

[PrincessSuzanne]

We went to eat at Fridays last night (Thursday) and we had to wait 15 minutes for a table! We were shocked. It was around 7 pm.

Maggie

My cousin said something to me the other day about restaurants not doing well, but I haven't seen it, except one place and I don't know it's normal level of business because it was our first time at this place. Almost all of the tables were taken, but there was no one waiting. Most of the more popular places (Friday's, Red Lobster, Chili's, Applebee's, etc) have lines almost all day, especially at normal eating times. We go out to eat ALOT and usually have to wait. The local Mexican restaurant is ALWAYS busy, guess it's the margaritas

Suzanne

 

[d1gitman]

I haven't read all the posts, but did read several. I can totally believe a complete meltdown is coming soon if something, anything doesn't change. Even then, I think that the process has begun and things will be like a depression-era-esque environment. A large number of business are leveraged to the hilt, on cooked-books, just like many consumers are. I truly believe our economy is a house of cards and the bottom is shaking, ready to crumble.
I wish I had a more positive belief, but based on what I have seen, I really think it's gonna get bad soon and not start to level off till mid 2010.

As far as posting lists speculating what stores are on the chopping block. Seems totally okay with me. I see no connection with warning people to use their gift cards quickly or not to buy any and it making retail employees feel bad. Are we supposed to lose out on gift cards to spare employees feelings? sounds absurd to me.

Fact is, we are all hurting and we should be speaking up. I think our pitch forks and torches should be directed towards senior management, executives and politicians. these are the vast majority of people who have been totally asleep at the wheel yet have the most profound affect on how things are handled. I chalk it up to the 80/20 rule. Working class does 80% of the work but gets 20% of hte reward. The people in charge do 20% work yet receive 80% of our reward. However, with everything falling apart around us, the rule gets distorted. The 80% working class get chopped to survive on the 20% left in the aftermath while the 20% in charge walk away with 80% of the pile.

Anyway, I am all in favor of calling out those who have failed. Many of these failures are far from honest mistakes and innocent oopses. A lot of unscrupulous lending and spending has taken place and now we all get to pay the price.

People are worried about how bad it is for retailers, well ponder this. Our Federal Government is way more upside down than ANY corporation. When are we gonna start putting our own Gov't on the list of chapter 11 filings.

my $.02

 

[brenalexacamp]

Not Tiffany's!!