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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (77713)	4/15/2008 7:12:11 AM
From: Dan3	Respond to of 116555

Retailing Chains Caught in a Wave of Bankruptcies - Front page of the NYT this morning ================================= April 15, 2008 Retailing Chains Caught in a Wave of Bankruptcies By MICHAEL BARBARO The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country. 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. The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable. Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry’s collective credit cards. “You have the makings of a wave of significant bankruptcies,” said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company’s interim chief financial officer and works at a corporate turnaround firm called AlixPartners. “For years, no deal was too ugly to finance,” he said. “But now, nobody will throw money at these companies.” 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.... There is much more at: nytimes.com

To: Crimson Ghost who wrote (77713)	4/15/2008 11:56:09 AM
From: mishedlo	Read Replies (3) \| Respond to of 116555

Obama Connects Weak Dollar To Bush Policies globaleconomicanalysis.blogspot.com It's not just the Wall Street that's broken, it's Main Street as well. The reason is the policies at the Fed, Congress, and this administration. The US can no longer afford to be the world's policeman. The dollar is sinking because we continue to try. US citizens have correctly put their finger on this and finally realize the number one thing we can do to support the economy is leave Iraq. Political pandering in Congress, bank bailouts and policies at the Fed, and Bush's warmongering and empire building are the reasons the entire US is fundamentally broken. It's high time for a change. Neither McCain or Hillary will give us that change. Mish