25% of Retailers May Go Bankrupt Within Two Years

[K Gardner]

http://clusterstock.alleyinsider.com/2008/12/25-of-retailers-may-go-bankrupt

Analysts estimate that from about 10% to 26% of all retailers are in financial distress and in danger of filing for Chapter 11. AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010. In the previous two years, the firm had estimated 4% to 7% of retailers then tracked were at a high risk for filing.

Granted, many retailers are perpetually on the verge of bankruptcy, but these are still unprecedented numbers. Retail, as we know it, is going to look very, very different a decade from now.

[RB TexLa]

1. How many different places does one need to purchase jeans from?

[w4rma]

2. I want more competition to Wal-Mart, not less. (nt)

[K Gardner]

7. More Mom and Pop, less to NO Walmart would be my hope.

[jmowreader]

19. You mean more minimum wage, zero benefits places?

[K Gardner]

22. Yes, because I'm against people making a living wage and having

access to healthcare.

:banghead:

[jmowreader]

23. Mom and pop stores aren't the place you look to for that

If anything, mom and pop pay LESS than big boxes. Retail is notorious for low-wage, no-benefit positions, and mom and pops are especially bad.

Plus, mom and pop have this annoying habit of nepotism.

I have a BETTER idea: let's return wealth-creating industries (mining, forestry, agriculture and manufacturing) to this nation, and cut down on the percentage of Americans who have to work in retail because there's nothing else.

[xchrom]

29. i was a mom pop store -- and far out stripped walmart etc

with pay etc -- so i could get good dedicated employees.
and so did all the small stores around me.

good employees -- and i'm one now -- don't WANT to work in big box stores.

it's a nothing enivironment.

[Doremus]

34. Locally owned "mom & pop" stores PAY LOCAL TAXES.

Unlike their big box competition, who are often given the keys to the city treasury on a silver platter.

Locals are more invested in the community and are more likely to be good business neighbors, unlike the anonymous boxes that suck up resources and give little, if anything, back in return.

Many of us don't pay minimum wage either, as noted in the post above mine. I appreciate good workers and pay them more than they could make at the local WalPuke. I also offer flexible scheduling and telecommuting for "back room" tasks. Go to WalPuke and ask them if they'd give you that.

Your obvious disdain for locally-owned businesses is not only NOT based on facts, it reveals a rather perplexing mindset for someone who posts at DU.

[dkf]

38. You had me until your generalization about what kind of people

should post at DU.

For some reason once someone types those words it poisons me to the cause.

[jmowreader]

46. My obvious disdain is for retail in general

It is a good "spouse" job--if your husband works in industry or your wife is a professional like a doctor or lawyer, retail isn't a bad place to earn some money. Before Reagan invented the maquiladora, that's what it was. Jobs for men in retail were almost all commissioned--men's clothing salesmen, realtors and car dealers. If you're able to sell on commission, you can make a good living.

Non-commissioned sales is a horrid "sole breadwinner" job, especially when it means both husband and wife have to work. And it's a living bitch to move from retail into another field; a couple years in retail and you'll have a very hard time convincing an employer you really do know how to do other things. One of my coworkers was an order puller at the store and had been for three years. He saw an ad in the paper looking for order pullers at a food warehouse. When he went to apply, the foreman told him he would never be hired in a warehouse because he didn't have experience in pulling orders.

America needs to get the fuck away from the notion that a job's a job and start opening wealth-creating businesses again.

[robinlynne]

40. i think you are mistaken. very mistaken. about mom and pop stores. they tend to respect people.

[jmowreader]

44. I've dealt with people who worked at both

It's no secret I worked at a big box for six years. Many of y'all were disappointed when my Customer of the Day stories ended.

A LOT of my coworkers came from mom and pops--Ace and True Value stores (those are buying associations; every Ace and every True Value store is independently owned) and local lumberyards. When I asked them why they came to work at Home Depot, the answer was routinely "better pay and health insurance." (Unlike Walmart, Home Depot has always offered benefits to part-timers.)

The big advantage a M&P has over a big box is it recognizes the unique skills of each of its employees. Big Boxes tend to view their employees as interchangeable...which gets really fun when the scheduler decides to not put anyone with a forklift license on duty in the lumber department during the busiest part of the day.

[sandnsea]

52. There's nothing left to log

Sorry to tell you. And where I live, the destructiveness of logging, farming and mining destroyed the rivers which in turn destroyed the fishing industry. There's nothing left here except tourism and retail. And retail clerks who have worked on commission have done quite well. As have the tour operation owners, restaurant owners, chefs, bartenders, and waitresses. It all depends on the circumstance. Mom and pop owners are also more likely to try to keep employees on during tough times because they know who has kids depending on them. We were all better off when the difference in income between owner and worker wasn't as great.

[MadMaddie]

4. Yes, I believe this is what the Repuglicans have touted all these

years, "The Market is correcting itself"!!:sarcasm:

We don't need 3 of the same type of store selling the same crap. Two will be fine and that will promote competition.

WalMart is a pox on this Nation and we need to find a way to competitively destroy it.

[dysfunctional press]

27. one probably doesn't need that many- but millions do.

[mrreowwr_kittty]

49. Yeah seriously. What's wrong with monopolies?

:sarcasm:

[Rabrrrrrr]

3. Good - maybe instead of paving 40 acres of good farming soil to put up 12 big box retail stores

on the south side of town when the north side of town, only two miles away, already has 70 acres of paved over farmland super stores, and the west side, a mere 3 miles away, has 140 acres of paved over Outlet Store Nirvana, we can save the land, and go back to a far less ludicrous amount of stores, strip malls, shopping malls, super centers, outlet malls, outlet stores, discount stores, dollar stores, convenience stores, drug stores, and all that other bullshit.

[K Gardner]

6. Agreed.

[John Q. Citizen]

8. where will the people currently working in that bullshit work?

Cutting lettuce?

And please don't get me wrong. I'm about as anti-consumer as it gets. But where will these people work?

Now it's true, the internet and fed-ex has effectively eliminated the need for the physical location of a lot of retailing, and land use is a major issue facing humans. When I'm visiting relatives in Southern Calif. and there is a repeating loop of businesses and residential as I drive the streets, I think that most people don't have to drive far to get most anything they might need.

i live in a rural area in MT, and much of what I need can only be gotten by driving 40 miles round trip.

My guess is that for the foreseeable future most of the people who will be laid off from these retail store jobs will be unemployed.

[azmouse]

11. If we could find a way to return manufacturing to this country

those people would have jobs. All I can do is hope that will happen some day.

[yardwork]

12. If we provide health care to everyone, entrepreneurs will step in.

The main reason that people can't start small businesses now is that the cost of health insurance is too high. If we provide universal healthcare to everyone small businesses will take off in the U.S.

[azmouse]

13. So much to do, so little time to do it in before

everything irretrievably falls apart.

You're right, first health care than the businesses can operate again.

[John Q. Citizen]

17. Lots of small business doesn't provide health care. so it's not a factor except to those few who do.

And it's been hacked and hewed to death so people have shitty insurance.

[yardwork]

25. Many many more people would have their own businesses if they didn't have to worry about health ins.

A great many people in the U.S. feel that they have no option but to go to work for a large corporation because they need the health coverage for themselves and their families. If there were universal healthcare, many of those folks would be entrepreneurs with their own businesses. They would manufacture interesting, well-made things that people need and want.

[John Q. Citizen]

48. absolutely people are prisoneers of their health insurance.Yet the vast majority of retail

jobs don't provide health coverage. Instead larger companies provide a buy in point for the employee, and the employee pays most if not all the premiums.

i have been in favor of a tax based single payer fee for service universal coverage system since the early 1990s because it is such an efficient way to make sure everyone has access to quality care when and if they need it.

We need to self insure as a country and cover everyone and get rid of all the redundant and useless scams.

A health insurance company's primary job is to collect as much money as possible and to pay out as little money as possible. That's a stupid way to finance health care for all.

[xchrom]

30. lot's of small businesses do too. nt

[cabluedem]

35. Agreed. It wont happen but I wish it would.

[Le Taz Hot]

45. Returning manufacturing to this country would be

a relatively easy thing to do:

#1 - tax penalties for those companies based in the U.S. that practice outsourcing.
#2 - tax incentives for those companies based in the U.S. that keep jobs in the U.S.

Problem solved. 'Course, there is that pesky little problem of political contributions that keep our illustrious Congresscritters from doing either one. :shrug:

[Rabrrrrrr]

41. Truthfully, though, if your question were a valid one, we'd really be screwed.

And I don't say that to belittle your question - it's worth asking. But on the other hand, look through the history of this country the vast quantities of jobs and professions that have disappeared. If we were to assume, as your question does, that someone who loses a job in one industry has absolutely no chance of ever finding work outside that industry, then this country would have almost no employment at all, because of the loss of wainwrights, chandlers, gong farmers, gaslamp lighters, nightcryers, haberdashery owners, saddle makers, steamboat workers, gold panners, charioteers, cotton pickers, cowboys, scribes, trolley drivers, elevator ladies, and so on and so on and so on.

What happens is that a creative and entrepreneurial person arises from the ashes to create something new and different.

So, those people currently working in those jobs will find other jobs to go to. That's what always happens. That's what will always happen.

[John Q. Citizen]

51. Yet retailing occurs everywhere around the world. And always will in some form or another.

It was done as barter during our hunter-gatherer and horticultural human organizational stages. And it just got more specialized on through post industrial societies.

Didn't millions die during the potato famine? That was one of those change periods that you are talking about?


I made my post in response to what I perceived as a moralistic tirade against consumerism. and while I myself share some of those same values, I also of course am aware of and concerned about people jobs. and I'm not opposed to mercantile economy per se.

but the consumer oriented, manipulated and driven economic imperative is a suspect model I think. It wastes an awful lot of resources and it pollutes our homes. The third world is repeating our rust belts' experience and we are of course buying it all on credit. (or we were)

The question isn't does a displaced worker find different employment ever, the question is do enough displaced workers all at once come and loot your house to eat. Because that has happened a lot. It doesn't always happen, but some entrepreneurial starving person gets it in their head and the shit hits the fan. We saw a lot of that and the reaction during the last depression.

and without another model to replace consumerism, won't we just limp on and back to consumerism? We can cut down a bunch more forests and rebuild all those old dilapidated retail outlets and build a bunch of new ones, when we have our boom on again in 2017?

After we've inflated ourselves out of debt.

[dysfunctional press]

28. as long as the existing stores agree to open up more of their check-out lanes...

i'm with you.

[Greyhound]

32. Imagine what a radical concept that would be, a city growing up around

commercial centers where everybody goes to get he stuff they need.

[Lucian]

33. Agreed.

[Mari333]

5. There is a man in my small town here who was a GOP candidate

for state rep. he didnt win, but he was a big time developer in this area....buying up real estate, selling it at inflated prices, getting loans against the real estate, buying more, more more, and then the house of cards collapsed.
he is well known in the area...yesterday I heard that he is bankrupt, changed his name ,so that the creditors wont find him..
and at least 4 stores in town are belly up this last month.

[DJ13]

9. .....and every.single.one.of.them.has consistently paid minimum wage

When your own employees cant afford to shop in your store theres something wrong.

[polichick]

10. Bad news in the short run could be good news in the long run...

This country could stand to rethink its values ~ so much energy and money goes into acquiring stuff, when we could put it into solving problems.

[TomInTib]

14. A friend of mine works for a huge retail liquidator.

They are sitting on $2.5billion of unsaleable retail goods.

At the beginning of the 4th Quarter, they did their '09 projections.

One of their projections was that 20,000+ retail doors would close in '09.

I hope mine aren't two of those doors.

[johnfunk]

15. Which liquidator? Great American?

[TomInTib]

16. I knew someone would ask me that.

For the life of me, I can never remember the company's name.

It is someone's name, though.

They are doing Linens & Things, if that helps.

[Vinca]

18. Maybe they deserve to go bankrupt.

I just browsed through the L.L. Bean winter sale catalog and out of hundreds of items there are 8 that were made in the United States. 8! Don't the people who are in charge and can make a difference get it? If our jobs go to China, we can't buy stuff.

[Statistical]

20. I heard on CNBC on the commute home....

The US has 5X the square footage of retail space per capita than then next country and 7x the average for the 1st world.

So even in half of all retail stores closed we would still HAVE 2x to 4x MORE retail stores than any other country on the face of the planet.

Stores way over expanded. That over expansion was built on "fake money. Consumers maxed credit cards, took out HELOC, and every time they sold their house to hop into a bigger one pocketed $10K, $20K, $50K or more.

Just as the banks were leveraged to the hilt and are going to have to continue to delverage over next 3-5 years the same thing will happen to consumers. Not only will spending decline 15%-20% (removing the "fake money") they will need to begin paying down the $1T in consumer debt in this country. Every $ spent repaying debt is a $ not buying something.

Long term the economy will recover by real spending by consumers will likely be DOWN 20% to 30% or more over the next decade.

[Kip Humphrey]

21. So? Can you spell: I-N-T-E-R-N-E-T-S?

[earth mom]

24. We all have to admit that there were too many stores, that we have been oversaturated

with places to shop.

In the past 15 years or so, every time I saw a new shopping center go up, I always thought, "who the hell are they going to get to shop there?!"

All those stores also tells me that the stuff from China cost those businesses literally pennies on the dollar and that's why they could all afford to open all those big box stores.

I'm not sorry to see them go. Hell No.

But I am sorry for the workers who have had their manufacturing jobs stolen and now their retail and service jobs trashed.

Where are those people going to work now?

:cry:

[xchrom]

31. we've been overstaurated with the same few big stores selling the same product.

what what haven't had -- for a good number of years is variety.

that's what small stores bring you.

[grace0418]

37. Exactly. When I had my own card/gift company with a friend of mine, we could sell

to local boutiques and they were thrilled to have cool, handmade items that you couldn't find at Target. Now that I no longer have my own business, I make a point to shop at the places that supported me when I did. People always rave about the things I find there.

[DainBramaged]

26. With cheap gas again, we can afford to drive farther to buy our stuff

[Deja Q]

36. OMG, it's the dreaded M-word!

"may"

I've just shit a brick!

[Algorem]

39. Haha.The Bushes made billions in holesale.Sold America a hole to jump in.

hope you like your hole,Bush voters.

[roody]

42. It will hurt but it is necessary. Our consumerist

lifestyle is not sustainable. Imagine a world of meaningful work.

[K Gardner]

50. You've hit the nail on the head here.

[AngryAmish]

43. That is why I do all my shopping at Venture

Has a nationwide retailer ever gone broke before?

[47of74]

47. Yes...

Montgomery Ward is the one that most readily comes to mind. Venture Stores also went broke and went out of business back in the late 90s. We had a Venture store around here that was later converted to a ShopKo.