marylyn
on 1/22/09 9:04 am

IT MAKES ME MAD TO SEE STORES CLOSING.BUT HELPS IN A LONG RUN I CAN GET RID OF SOME CRIEDT CARES

Where You Won't Shop in 2009

by Tom Van Riper
Wednesday, January 21, 2009provided by

While industry executives and shoppers will remember 2008 as the year the party ended, figure 2009 to be the year of the hangover. Already, Circuit City, Linens 'N Things and Mervyn's stores are going away. Sharper Image is too, though the company will continue to sell some of its high-end gadgets through license agreements with other retailers.

More pain is on the way. One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. That means the market is still far too saturated with stores.

More from Forbes.com:

• In Depth: Who's Set to Shutter Stores?

• In Depth: 10 Things We're Still Buying

• In Depth: Gift Cards From These 10 Stores? Use 'Em Now

Expect closings and bankruptcies to rattle the likes of Lane Bryant, Gap, and Starbucks. It's the inevitable counterpunch to the days of retailers fighting hand over fist for market share during an era of loose credit and minuscule interest rates.

Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers' debt loads and credit access don't figure to recover to pre-party levels for quite awhile.

"I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."

Retailers at risk in 2009, he thinks, include outerwear specialist Eddie Bauer and teen-apparel-seller Pacific Sunwear, along with Zales, the big jewelry chain. All three shuttered at least 8% of their U.S. stores last year, with many more closings expected. The same is largely true of Charming Shoppes, the owner of Lane Bryant, which closed 150 stores last year. With a mountain of debt and losses totaling over $260 million over the most recent 12-month reporting period, the company will close another 100 locations this year.

Another possible casualty: Sears Holdings, operator of Sears and Kmart stores. A key to hedge fund manager Eddie Lampert's 2005 merger of the two chains was in the underlying real estate. But with those values down 30% or so since then, slumping sale**** even worse.

"I'd be surprised if Sears-Kmart makes it through the year," says Britt Beemer, who runs retail market-research firm America's Research Group.

Non-apparel specialists like Starbucks and Sprint Nextel won't be going away, but they will close hundreds more stores during the coming year, Davidowitz predicts. Narrow specialties (Sprint's cellphones) and high prices (Starbucks' coffee) are tough sells as the consumer mood turns thrifty. What plagues Starbucks will also affect other upscale goody chains like Mrs. Fields' Cookies, and causal dining outlets like Applebee's and Cheesecake Factory. Any of the neighborhood outlets for those restaurant chains could be a casualty this year. For too many customers now, it's McDonald's or bust.

Davidowitz doesn't think a huge government stimulus will help. Better to let things bottom out naturally before regrouping. "Obama's plan will make it worse," he says. "We got into this by borrowing and stimulating, now he wants to borrow and stimulate more."

In Pictures: Where You Won't Shop in 2009

Charming Shoppes (owner of Lane Bryant, Fashion Bug, Catherines)

Specialty: Women's plus-size

2008 closings: 150 (6% of total)

Outlook: Lots of debt, performance is terrible (losses of over $260 million for the 12 months ended in November 2008). The company already said it will close at least 100 more stores this year. Who knows if it can survive?

Eddie Bauer

Specialty: Outerwear

2008 closings: 29 (8% of total)

Outlook: The specialty retailer catering to 30- to 54-year-olds is on the critical list as losses mount and shares trade at 50 cents.

Ultimately unlikely to make it.

Timberland

Specialty: Outdoor Apparel

2008 closings: 40 (16% of total)

Outlook: Not on the critical list, but expect significantly more closings.

The footwear company is still sponsoring this year's Sundance Film Festival.

Ann Taylor

Specialty: Women's apparel

2008 closings: 60 (6% of total)

Outlook: After 180 layoffs, the women's clothing chain announced an additional 57 store closings over the next two years.

Relatively healthier than other struggling retailers, but figures to shrink further.

Zales/Piercing Pagoda

Specialty: Jewelry

2008 closings: 105 (12% of total)

Outlook: Absolutely in free fall, more closings for sure.

Zales may not make it.

Click here for the full list of Who's Set to Shutter Stores?

bornagain3
on 1/22/09 10:42 am - Scottsville, VA

REALIZE Band on 09/29/08

Yes, the economic times are very difficult. I am just hoping that we can all hang in there until things start to get better. I feel very sad for the ones who are loosing their jobs.

Jeane

Connie D.
on 1/22/09 8:57 pm

RNY on 08/29/07

People have overspent for so long. More and more stores cropped up all the time. Now......everyone is in trouble. It doesn't surprise me that so many are going under. People just can't afford to shop like that anymore.

I sure hope things turn around soon.

Hugs...connie d

avidreader
on 1/23/09 2:13 am - Cary, NC

RNY on 03/24/08

Don't know abour your town, but there's a Starbucks on every corner in my area. There are even a couple of places where there's a Starbucks on each side of the same road - right across from each other. This has never made sense to me - has never seemed like a good business move. Why saturate an area with the same product? I can see putting them inside book stores, etc.. but to build a new building and spend all that money - there are 31 stores within a 10 mile radius of my house!!!! Seems to me like a good idea to scale back!!!

Highest/Surgery/Current/Goal
250/241/139.5/125
I have a new philosophy, I'm only going to dread one day at a time. Charlie Brown

MARCIAM
on 1/23/09 6:33 am - Sayville, NY

RNY on 09/22/08

In our part of New York there are strip malls wherever you drive. I have wondered for years how many pizza places, delis etc. one neighborhood is supposed to have. Up at our corner the pizza place seems to change hands every few months... It amazes me when people look at an area how they expect that their store will do better than the other 100 of them...

Marcia 297/169 so far/140
RNY on 9/22/08
My life is starting over & yours can too!