The New York Times today in a story Retailing Chains Caught in a Wave of Bankruptcies By Michael Barbaro:
Since last fall, eight mostly midsize chains ? as diverse as the furniture store Levitz and the electronics seller Sharper Image ? have filed for bankruptcy protection as they staggered under mounting debt and declining sales.
But the troubles are quickly spreading to bigger national companies, like Linens ?n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.
Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.
When you lose stores because people can?t buy, you lose services because stores can?t stock their shelves and pay their bills:
Because retailers rely on a broad network of suppliers, their bankruptcies are rippling across the economy. The cash-short chains are leaving behind tens of millions of dollars in unpaid bills to shipping companies, furniture manufacturers, mall owners and advertising agencies. Many are unlikely to be paid in full, spreading the economic pain.
When it filed for bankruptcy, Sharper Image owed $6.6 million to United Parcel Service. The furniture chain Levitz owed Sealy $1.4 million.
And it is not just large companies that are absorbing the losses. When Domain, the furniture retailer, filed for bankruptcy, it owed On Time Express, a 90-employee transportation and logistics company in Tempe, Ariz., about $30,000.
And then of course people can?t buy because they lose their jobs when stores and services close down.
If you aren?t big oil or an Iraq war profiteer, you would most likely be a person somewhere in this picture. You could be a person paying more for food because it moves around in trucks that burn gas and paying more for gas to drive to work, and therefore you are less able to buy those shoes you want from Foot Locker or that cool lamp from Sharper Image. Or you could be one of the employees getting laid off because the store you work for is closing. In fact, you could be both. You could even be both of these and a person whose house is being foreclosed ? which if that were me, I know I would be a person going without medical care for stress, which I wouldn?t be able to afford.
I?m just glad our decider has a stimulus package coming down the pike that will fix everything.