Thursday, June 26, 2008


High and rising world oil and food prices, the implosion of the US housing bubble and the ensuing consumer credit vapour lock have cash-strapped US consumers staying out of retail stores in droves, and this is forcing dozens of US retailers to close hundreds of stores.

Information technology related companies that are closing stores include CompUSA going out of business, Sprint Nextel closing 125 locations, Movie Gallery closing 560 movie rental outlets, and bankrupt Sharper Image shutting down 90 to 180 stores.

Other retailers shutting down shops are: Ann Taylor, 117 stores; Eddie Bauer, 29 stores; Cache, 20 to 23 stores; Lane Bryant, 150 stores; Talbots, 100 stores; Gap, 85 stores; Foot Locker, 140 stores; Wickes going out of business; Levitz going out of business; Zales, 105 stores; Disney, 98 stores; Home Depot, 15 stores; Macy's, 9 stores; Pep Boys, 33 stores; Ethan Allen, 12 stores; Wilsons, 158 stores; Pacific Sunwear, 228 stores; Bombay Company, 384 stores; KB Toys, 356 stores; and Dillards, six stores. Sheesh kebab!

The US financial sector has already been decimated by the fallout from the recent subprime mortgage fiasco. Workers laid off from financial services and retailing positions tend to get forced into lower-paying service jobs. But with consumers being squeezed by increasing gas and food prices, they're not driving and patronising bars and restaurants as often, so it is somewhat doubtful that all of those laid-off employees will be able to find other work soon.

It's hard not to think that the US economy might get worse before it starts getting better.

Source - Inquirer


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