By Barbara Farfan, About.com Guide to Retail Industry
The sum total of the numbers found in the U.S. retail industry store closings, store openings, job cuts, and Chapter 11 assessments in the second half of September don’t add up to recovery yet. But despite the threat of recessionary aftershocks which some predict will hit the retail industry in the next year, many retailers are finding opportunities for expansion in the rubble of the recession’s initial quake.
The most recent major additions to the retail store closings list were more sobering than surprising. In any other year, Blockbuster’s announcement of 960 store closings and 10,000 retail jobs cuts would have been big news. But after a year’s worth of upstaging, Blockbuster’s huge jump up the store closing list was almost uneventful.
But the total of 1,131 additional store closings that were added to the 2009 tally in the past couple of weeks is nothing to yawn about. And these sobering retail figures are definitely a stark contrast to the state-of-the-economy picture that was painted by Ben Bernanke’s “recession is over” speech this month.
There are still some U.S. retail chains that have not adjusted to the new normal of American consumerism. It seems as if they have been biding their time, hoping that the newfound American frugality is a quickly passing fad rather than a permanent shift in values. The resistance of these chains may prove to have been futile, however.
There are two different groups of experts who agree with that position and are predicting that a second wave of economic fallout will impact the retail industry in the not too distant future
Audit Integrity, a Los Angeles research services company, released the results of an independent corporate bankruptcy study which identified 20 major U.S. corporations that are at risk for filing bankruptcy in the next 12 months. If the Audit Integrity numbers are correct, the retail operations of hMacy’s, Oshkosh, Rite Aid, Sprint Nextel, and Goodyear are in danger of following in the footsteps of Circuit City, KB Toys and Linens ‘n Things.
A different assessment done by commercial real estate investment firm Madison Marquette identified a separate list of U.S. retail chains at risk for bankruptcy in the not too distant future. The retailers at biggest risk on that list include Chico’s, Cost Plus World Market, Dillards, and Talbots.
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