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Retail Apocalypse? Major Chains Closing Hundreds Of Stores

stores closing retail apocalypse best buyHundreds of stores across the nation are closing as some of America’s most famous retailers struggle to stay in business.

The country is facing what CNBC has labeled a tsunami of store closings and blogger Michael Snyder has called a retail apocalypse.

Sears, K-Mart, Best Buy and JC Penney are among the big names in American retail that could disappear in the coming years, according to investment analysts. If or when these chains collapse, thousands of jobs and hundreds of millions of dollars in sales tax revenue will disappear.

Major retailers are posed to close 300 stores in the United States this year and that is only the beginning, CNBC reported. Up to half of the retail stores in the United States could disappear in the next 10 years, analyst Michael Burden told CNBC.

“Shoppers will likely see an average decrease in overall retail square footage of between one-third and one-half within the next five to 10 years, as a shift to e-commerce brings with it fewer mall visits and a lesser need to keep inventory stocked in-store,” Burden told CNBC.

Shocking Numbers of the Retail Apocalypse

The numbers related to the “retail apocalypse” are staggering.

New book reveals how to keep this “gangster” economy from murdering your money…

The scary statistics include:

  • JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
  • Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
  • Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
  • Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
  • Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
  • Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
  • Aeropostale is planning to close 175 stores.
  • Blockbuster has closed down all of its stores.

Retail Apocalypse Will Get Worse

No new indoor shopping malls have been built in the United States since 2006, real estate executive Rick Caruso told CNBC.

So what’s causing the retail apocalypse? Different analysts have different answers. Motley Fool writer John Maxfield blames Amazon.com and other online retailers. Maxfield notes that online retailers have lower overhead and often can offer better prices.

He also said that many retailers are in much worse financial shape than many believe. To keep their shelves stocked, retailers such as Best Buy purchase goods on consignment. That is, a manufacturer ships items to the store that haven’t been paid for yet. The idea is that the goods will sell and generate enough revenue to pay the bill.

The problem with this arrangement is that if the goods don’t sell, the retailer still has to pay for them. If it cannot pay for the goods, the retailer may have to declare bankruptcy and shut down. That’s what happened to Circuit City.

Is the Middle Class Disappearing?

Another popular theory is the number of middle class people who make up the majority of these stores’ customers is falling. The New York Times recently found that businesses that sell to the rich are thriving while those that cater to the middle class such as Sears are floundering.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” PricewaterhouseCoopers Analyst John G. Maxwell told The Times. “You don’t want to be stuck in the middle.”

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9 comments

  1. “Free Healthcare,”and almost 40.000 pages of regulations to go with it, 3 times the GDP in debt generation, currency/gold manipulation, bailouts for the criminals, too big to fail/too big to jail…..

    Need I go on?

    May God forgive us what we’ve let these bastards do to us.

    • we are so screwed. i tightened down the budget and have scaled back on my own business. no longer interested in working harder for less. no longer motivated to “produce”. this goes back so far it’s not even funny. we have all been fools hung up on stupid social issues instead of watching what they have been doing to us. its time for a revolution. if we don’t we are going to be the USSA for real.

  2. Wake up People!! What we’ve known is coming for a long time is now about to over take us. It’s time we stopped doing what we are doing and get things right. We can’t just sit back and take it easy anymore. Only we can prevent it from happening. First, there was Oklahoma City, then 9/11, then Katrina. Now this. What’s next? We have got to work together or it’s over for our kids and all future Americans. We all know this began when Ike was elected President with help from the big European money machines who just wanted a piece of America. He got his interstate highway system and the first step was taken. JFK, RFK, MLK died and who lied about it? Everybody who knew. Nixon’s daughter married Ike’s grandson and we got another generation closer to the end. Carter almost blew the top off, but that rabbit did him in. 8 years of Reagan, 4 for Bush Sr., then 8 for Willie and who steps in??? That’s right — Bush, Jr. and the final key was turned. They got their man Obama in and leading the way and this is our last chance. Well, I’m not going to take it sitting down and you shouldn’t either. Our kids are next and no one cares.

    • revolution. the time is now. how can we have a quiet revolution? aside from 2014? i say stop paying taxes. all of us. they cant take it all from all of us. they can “set a few examples” to try and bully us but ultimately WE have the power of the purse.

  3. Have to agree with you Doc. We are in terrible times, no intelligent person can dispute that. My boys are lucky enough to have decent jobs, not the best, just decent. And not in retail. I do worry about our granddaughter that lives with granny and me. What about her future ?

  4. In a way the tax revolution has begun, due to our so called leaders inability to create jobs(real taxpaying jobs, not government jobs).When people are unemployed, they do not pay taxes,and when the ultra rich have ten accountant attorneys to help them cheat on taxes,they do not pay taxes either.The next revolution will be very simply one in which people just stay home and the government finally can not do any more money manipulation and runs out of money for good.

  5. some are referring to “The Tax Honesty” Movement which has been on going since early ’90s it’s just that MSM and the internet gods have been doing their best to censor the facts. In 2009 a continental congress convened members from each state, they debated and drafted “The Articles of Freedom” which have been presented to all of US Congress during the Bush Jr. administration, and the general public has heard nothing about it.

    I would encourage any reading these comments to begin the journey of actually understanding how the loss of liberty has transpired, your “fair share” really isn’t fair at all.

    http://www.givemeliberty.org

  6. I don’t get it? Why don’t these companies just get free money from the Federal Reserve like Goldman Sachs, Berkshirehathaway, G.E., Harley Davidson, Verizon, AT&T, GM, Ford etc.?

    The Federal Reserve is literally giving away money…but only if you are a special person or company in clear violation of their charter and the law and the spirit of capitalism.

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