Major U.S. Retailers Are Closing More Than 6,000 Stores

Closed - Public DomainIf the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores?  The “retail apocalypse” that I have written about so frequently appears to be accelerating.  As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable.  So if this is happening already, what are things going to look like once the next recession strikes?  For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way.  And since I started The Economic Collapse Blog at the end of 2009, I have never seen as many indications that we are headed into another major economic downturn as I do right now.  If retailers are closing this many stores already, what are our malls and shopping centers going to look like a few years from now?

The list below comes from information compiled by About.com, but I have only included major retailers that have announced plans to close at least 10 stores.  Most of these closures will take place this year, but in some instances the closures are scheduled to be phased in over a number of years.  As you can see, the number of stores that are being permanently shut down is absolutely staggering…

180 Abercrombie & Fitch (by 2015)

75 Aeropostale (through January 2015)

150 American Eagle Outfitters (through 2017)

223 Barnes & Noble (through 2023)

265 Body Central / Body Shop

66 Bottom Dollar Food

25 Build-A-Bear (through 2015)

32 C. Wonder

21 Cache

120 Chico’s (through 2017)

200 Children’s Place (through 2017)

17 Christopher & Banks

70 Coach (fiscal 2015)

70 Coco’s /Carrows

300 Deb Shops

92 Delia’s

340 Dollar Tree/Family Dollar

39 Einstein Bros. Bagels

50 Express (through 2015)

31 Frederick’s of Hollywood

50 Fresh & Easy Grocey Stores

14 Friendly’s

65 Future Shop (Best Buy Canada)

54 Golf Galaxy (by 2016)

50 Guess (through 2015)

26 Gymboree

40 JCPenney

127 Jones New York Outlet

10 Just Baked

28 Kate Spade Saturday & Jack Spade

14 Macy’s

400 Office Depot/Office Max (by 2016)

63 Pep Boys (“in the coming years”)

100 Pier One (by 2017)

20 Pick ’n Save (by 2017)

1,784 Radio Shack

13 Ruby Tuesday

77 Sears

10 SpartanNash Grocery Stores

55 Staples (2015)

133 Target, Canada (bankruptcy)

31 Tiger Direct

200 Walgreens (by 2017)

10 West Marine

338 Wet Seal

80 Wolverine World Wide (2015 – Stride Rite & Keds)

So why is this happening?

Without a doubt, Internet retailing is taking a huge toll on brick and mortar stores, and this is a trend that is not going to end any time soon.

But as Thad Beversdorf has pointed out, we have also seen a stunning decline in true discretionary consumer spending over the past six months…

What we find is that over the past 6 months we had a tremendous drop in true discretionary consumer spending. Within the overall downtrend we do see a bit of a rally in February but quite ominously that rally failed and the bottom absolutely fell out. Again the importance is it confirms the fundamental theory that consumer spending is showing the initial signs of a severe pull back. A worrying signal to be certain as we would expect this pull back to begin impacting other areas of consumer spending. The reason is that American consumers typically do not voluntarily pull back like that on spending but do so because they have run out of credit. And if credit is running thin it will surely be felt in all spending.

The truth is that middle class U.S. consumers are tapped out.  Most families are just scraping by financially from month to month.  For most Americans, there simply is not a whole lot of extra money left over to go shopping with these days.

In fact, at this point approximately one out of every four Americans spend at least half of their incomes just on rent

More than one in four Americans are spending at least half of their family income on rent – leaving little money left to purchase groceries, buy clothing or put gas in the car, new figures have revealed.

A staggering 11.25 million households consume 50 percent or more of their income on housing and utilities, according to an analysis of Census data by nonprofit firm, Enterprise Community Partners.

And 1.8 million of these households spend at least 70 percent of their paychecks on rent.

The surging cost of rental housing has affected a rising number of families since the Great Recession hit in 2007. Officials define housing costs in excess of 30 percent of income as burdensome.

For decades, the U.S. economy was powered by a free spending middle class that had plenty of discretionary income to throw around.  But now that the middle class is being systematically destroyed, that paradigm is changing.  Americans families simply do not have the same resources that they once did, and that spells big trouble for retailers.

As you read this article, the United States still has more retail space per person than any other nation on the planet.  But as stores close by the thousands, “space available” signs are going to be popping up everywhere.  This is especially going to be true in poor and lower middle class neighborhoods.  Especially after what we just witnessed in Baltimore, many retailers are not going to hesitate to shut down underperforming locations in impoverished areas.

And remember, the next major economic crisis has not even arrived yet.  Once it does, the business environment in this country is going to change dramatically, and a few years from now America is going to look far different than it does right now.

 

What Recovery? Sears And J.C. Penney Are DYING

Sears - Photo by Belus Capital AdvisorsTwo of the largest retailers in America are steamrolling toward bankruptcy.  Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape.  Once upon a time, Sears was actually the largest retailer in the United States, and even today Sears and J.C. Penney are “anchor stores” in malls all over the country.  When I was growing up, my mother would take me to the mall when it was time to go clothes shopping, and there were usually just two options: Sears or J.C. Penney.  When I got older, I actually worked for Sears for a little while.  At the time, nobody would have ever imagined that Sears or J.C. Penney could go out of business someday.  But that is precisely what is happening.  They are both shutting down unprofitable stores and laying off employees in a desperate attempt to avoid bankruptcy, but everyone knows that they are just delaying the inevitable.  These two great retail giants are dying, and they certainly won’t be the last to fall.  This is just the beginning.

The Death Of Sears

Sales have declined at Sears for 27 quarters in a row, and the legendary retailer has been closing hundreds of stores and selling off property in a frantic attempt to turn things around.

Unfortunately for Sears, it is not working.  In fact, Sears has announced that it expects to lose “between $250 million to $360 million” for the quarter that will end on February 1st.

Things have gotten so bad that Sears is even making commercials that openly acknowledge how badly it is struggling.  For example, consider the following bit of dialogue from a recent Sears television commercial featuring two young women…

“Wait, the movie theater is on the other side,” the passenger says.

“But Sears always has parking!” the driver responds.

Sears always has parking???

Of course the unspoken admission is that Sears always has parking because nobody shops there anymore.

I have posted video of the commercial below…

A couple of months ago I walked into a Sears store in the middle of the week and it was like a ghost town.  A few associates were milling around here and there having private discussions among themselves, but other than that it was eerily quiet.

You can find 18 incredibly depressing photographs which do a great job of illustrating why Sears is steadily dying right here.  This was once one of America’s greatest companies, but soon it will be dead.

The Death Of J.C. Penney

J.C. Penny has been a dead man walking for a long time.  In some ways, it is in even worse shape than Sears.

If you can believe it, J.C. Penney actually lost 586 million dollars during the second quarter of 2013 alone.

How in the world do you lose 586 million dollars in three months?

Are they paying employees to flush giant piles of cash down the toilets?

This week J.C. Penney announced that it is eliminating 2,000 jobs and closing 33 stores.  The following is a list of the store closings that was released to the public…

Selma, Ala. — Selma Mall

Rancho Cucamonga, Calif. — Arrow Plaza

Colorado Springs — Chapel Hills Mall

Meriden, Conn. — Meriden Square

Leesburg, Fla. — Lake Square Mall

Port Richey, Fla. — Gulf View Square

Muscatine, Iowa — Muscatine Mall

Bloomingdale, Ill. — Stratford Square Mall

Forsyth, Ill. — Hickory Point Mall

Marion, Ind. — Five Points Mall

Warsaw, Ind. — Marketplace Shopping Center

Salisbury, Md. — The Centre at Salisbury

Marquette, Mich. — Westwood Plaza

Worthington, Minn. — Northland Mall

Gautier, Miss. — Singing River Mall

Natchez, Miss. — Natchez Mall

Butte, Mont. — Butte Plaza Shopping Center

Cut Bank, Mont.

Kinston, N.C. — Vernon Park Mall

Burlington, N.J. — Burlington Center

Phillipsburg, N.J. — Phillipsburg Mall

Wooster, Ohio — Wayne Towne Plaza

Exton, Pa. — Exton Square Mall

Hazleton, Pa. — LaurelMall

Washington, Pa. — Washington Mall

Chattanooga — Northgate Mall

Bristol, Va. — Bristol Mall

Norfolk, Va. — Military Circle Mall

Fond du Lac, Wis., Forest Mall

Janesville, Wis. — Janesville Mall

Rhinelander, Wis. — Lincoln Plaza Center

Rice Lake, Wis. — Cedar Mall

Wausau, Wis. — Wausau Mall

The CEO of J.C. Penney says that these closures were necessary for the future of the company…

“As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” CEO Myron Ullman said in a news release.

Actually, his statement would be a lot more accurate if he replaced “continue to progress toward long-term profitable growth” with ” prepare for bankruptcy”.

It would be hard to overstate how much of a disaster 2013 was for J.C. Penney.  The following is an excerpt from a recent CNN article

It’s been a brutal year for J.C. Penney, its stock falling over 60% in the past 12 months. The company has been losing hundreds of millions of dollars per quarter, and is in the midst of another turnaround effort after ousting former Apple executive Ron Johnson last year.

Overall, shares of J.C. Penney have fallen by an astounding 84 percent since February 2012.  And keep in mind that this decline has happened during one of the greatest stock market rallies of all-time.

For now, J.C. Penney will continue to try to desperately raise more cash from investors that are foolish enough to give it to them, but all that is really accomplishing is just delaying the inevitable.

If you would like to see some photos that graphically illustrate why J.C. Penney is falling apart, you can find some right here.

And of course Sears and J.C. Penney are not the only large retailers that have fallen on hard times.  This week the CEO of Best Buy admitted that sales declined at his chain during the holiday season…

Best Buy shares skid on Thursday after the retailer said total revenue and sales at its established U.S stores fell in the all-important holiday season due to intense discounting by rivals, supply constraints for key products and weak traffic in December.

In the immediate aftermath of that announcement, Best Buy stock was down more than 30 percent in pre-market trading.

And Macy’s just announced that it is laying off 2,500 employees in an attempt to move in a more profitable direction.

So why is all of this happening?

Aren’t we supposed to be in the midst of an “economic recovery”?

That is what the Obama administration and the mainstream media keep telling us, but it is simply not true.

In fact, a new Gallup survey has found that the number of Americans that are “financially worse off” than a year ago is significantly higher than the number of Americans that say that they are “financially better off” than a year ago…

More Americans, 42%, say they are financially worse off now than they were a year ago, reversing the lower levels found over the past two years. Just more than a third of Americans say their financial situation has improved from a year ago.

That is why these stores are dying.

Things continue to get even worse for the middle class.

But a lot of people out there will continue to deny what is happening right in front of their eyes.  They are kind of like that woman over in California who was conned out of half a million dollars by a Nigerian online dating scam.  They will never admit the truth until it is far too late to do anything about it.

So have you been to a Sears or a J.C. Penney lately?

Do you believe that they will survive?

Please feel free to share what you think by posting a comment below…

Mourn For America: Whenever A Tragedy Happens They Take Even More Freedom From Us

Martial Law In Boston - Photo from shtfplan.comWhat in the world is happening to America?  Over the past couple of decades, the federal government has used just about every major national tragedy as an excuse to take even more liberty and freedom away from us.  And without a doubt, the Boston Marathon bombing was a great national tragedy.  I don’t think that any of us will forget the images that we have seen over the past week.  All of those responsible for this attack should be exposed, hunted down, tried and punished.  Unfortunately, what always seems to happen is that it is the American people that seem to get punished the most for these tragedies.  Over the past couple of decades we have been told again and again that if we will just give up a little bit more freedom that the authorities will be able to keep us safe.  But you know what?  It is IMPOSSIBLE for them to keep us safe.  There is no way in the world that the federal government can protect us from all of the bad guys in the world.  We are a country that is absolutely teeming with “soft targets” – malls, churches, schools, concerts, sporting events, etc.  No matter how much money we spend, there is no way that the federal government will ever be able to provide enough security for all of those soft targets.  Even if our society morphed into something that resembled George Orwell’s “1984”, the government would still never be able to guarantee our safety.  Unfortunately, in the aftermath of this attack there will inevitably be calls for “increased security” and “more anti-terror legislation”.  The answer always seems to be to expand the emerging police state.  But it is getting to the point where all of this “security” is becoming absolutely suffocating, and yet it doesn’t seem to be keeping us any safer.  So where does all of this end?  Are we going to completely throw out the entire U.S. Constitution in a desperate attempt to feel a little bit safer?  Or are we going to choose to live our lives without fear no matter what others may try to do to us?

Benjamin Franklin once made the following statement…

“Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.”

Sadly, the way that the American people have responded to national tragedies over the past couple of decades would have made our founding fathers greatly ashamed.  The American people have been way too willing to give up liberty in exchange for the promise of safety.

We have been told that the terrorists hate us because of our liberties and freedoms.  But we have also been told that in order to be “safe” from those terrorists we have got to give up those liberties and freedoms.

So who is really winning?

We seem to have forgotten some of the most basic lessons in life.

If you cower in fear when a bully comes after you, what is the bully going to do?

The bully is just going to keep coming after you because his actions are being rewarded.

Those that are trying to create fear love it when you become fearful.  It is exactly what they want.

The appropriate response to a great national tragedy is to reject fear and to continue to boldly live our lives as if nobody could ever shake us.

But instead, the atmosphere of fear in America continues to grow.

And yes, there are common sense things that our government should be doing to keep bad guys away from us.

For example, the number one thing that the federal government should be doing is to secure the border.  Every single day, thousands upon thousands of people that we don’t know anything about pour into this country.  And yet the federal government has absolutely refused to secure our borders for decades.

Until the federal government secures our borders, they should not ask any of us to sacrifice a single ounce of liberty or freedom in the name of “national security”.

But even as the Obama administration treats our border security like a joke and continues to import huge numbers of people from radical areas of the Middle East, they continue to tell us that “domestic terror” is the next great threat that we are facing.

Many of our other politicians are buying into this philosophy as well.  Senator Lindsey Graham says that the attack in Boston is a perfect example of “why the homeland is the battlefield“.

So if “the homeland is the battlefield”, then who is the enemy?

Well, a U.S. Army Reserve training presentation recently identified evangelical Christians as “religious extremists“, and since Barack Obama entered the White House there have been numerous government reports that have identified Christians, “constitutionalists”, patriots, anti-abortion activists, conspiracy theorists and gun owners as “potential terrorists”.

So where does all of this end?

Are the American people rapidly becoming the enemy?

Will we be constantly scared to death of one another?

Will the entire nation exist in a never ending environment of fear?

Will we eventually have the TSA and the Department of Homeland Security patrolling every mall, every church, every school, every concert and every sporting event?

Unfortunately, the bad guys will always be able to find a soft target, and there will be more terror attacks in the future no matter how much security we pour on.  Once upon a time this nation was greatly blessed with peace and security, but now that hedge of protection is gone.  The federal government could give the Department of Homeland Security trillions of dollars a year and it would not make much of a difference.  We live in a world that is becoming increasingly unstable, and bad guys are going to do bad things.

Yes, there are some common sense things that we can do to make our nation more secure.  At this point, the federal government is not doing most of those things.

But no matter how hard we try, bad things are going to happen.  When those bad things happen, what we can control is how we respond to them.

That is why what just happened in Boston is so alarming.  The entire city was put into a complete lockdown for nearly two days.  It was a preview of what could happen nationwide if martial law was declared.  It was an over the top display of force that clearly demonstrated to the rest of the world how incredibly frightened we are.

Some of the things we saw in Boston were absolutely disgraceful.  For example, you can see video of an innocent Watertown family being ripped out of their home at gunpoint right here.

Do you know what this tells the rest of the world?

It tells them that terrorism works.

It tells them that one small incident is enough to send the entire nation into a full-blown panic attack.

You can see some more photos of martial law in Boston right here.  Instead of making things better, this is just going to make the atmosphere of fear in this nation even worse.

And you know what?  None of those heavily armed men even found the second suspect.  He was actually found by a neighbor that had gone out to take a smoke.

Like most Americans, I absolutely hate terrorism in all the forms that it takes.

But we are not going to prevent future terrorism by treating the U.S. Constitution like a piece of trash.  We have now shown the world that we are willing to throw out our most important constitutional rights the moment that a “threat” arises, and this is just going to encourage even more terrorism.

You see, those that engage in terrorism want attention and they want to create fear.  When we give them attention and we allow them to create fear we give them exactly what they want.

Is there anyone out there that can defend what we just saw in Boston?  I can’t imagine any American that still loves the Constitution being proud of what just happened.  I think that Karl Denninger put it quite eloquently the other day…

By effectively occupying a part of the Boston metro area they made an utter mockery of the 4th Amendment. There was no “hot pursuit” and thus no argument available to them allowing searches of private property without consent or a warrant. Not only did they search without a warrant there were multiple reports through the day of seizure of firearms, among other things.

Sadly, most Americans seem to be more than willing to disregard the U.S. Constitution these days.  Most of them are incredibly scared and they just want someone in a position of authority to assure them that they will be safe.

So I am sure that in the months ahead we will see “security” get even tighter in this country.  With each subsequent tragedy, it will just get tighter and tighter until we can barely even breathe.

This is not the answer to any of our problems.  In fact, it is just going to make many of the problems that we are facing as a nation far worse.

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