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clothes_horse


Dooney & Bourke

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interesting article: Where You Won't Shop in 2009
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Where You Won't Shop in 2009

by Tom Van Riper
Wednesday, January 21, 2009provided by

While industry executives and shoppers will remember 2008 as the year the party ended, figure 2009 to be the year of the hangover. Already, Circuit City, Linens 'N Things and Mervyn's stores are going away. Sharper Image is too, though the company will continue to sell some of its high-end gadgets through license agreements with other retailers.

More pain is on the way. One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. That means the market is still far too saturated with stores.

Expect closings and bankruptcies to rattle the likes of Lane Bryant, Gap, and Starbucks. It's the inevitable counterpunch to the days of retailers fighting hand over fist for market share during an era of loose credit and minuscule interest rates.

Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers' debt loads and credit access don't figure to recover to pre-party levels for quite awhile.

"I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."

Retailers at risk in 2009, he thinks, include outerwear specialist Eddie Bauer and teen-apparel-seller Pacific Sunwear, along with Zales, the big jewelry chain. All three shuttered at least 8% of their U.S. stores last year, with many more closings expected. The same is largely true of Charming Shoppes, the owner of Lane Bryant, which closed 150 stores last year. With a mountain of debt and losses totaling over $260 million over the most recent 12-month reporting period, the company will close another 100 locations this year.

Another possible casualty: Sears Holdings, operator of Sears and Kmart stores. A key to hedge fund manager Eddie Lampert's 2005 merger of the two chains was in the underlying real estate. But with those values down 30% or so since then, slumping sales hit even worse.

"I'd be surprised if Sears-Kmart makes it through the year," says Britt Beemer, who runs retail market-research firm America's Research Group.

Non-apparel specialists like Starbucks and Sprint Nextel won't be going away, but they will close hundreds more stores during the coming year, Davidowitz predicts. Narrow specialties (Sprint's cellphones) and high prices (Starbucks' coffee) are tough sells as the consumer mood turns thrifty. What plagues Starbucks will also affect other upscale goody chains like Mrs. Fields' Cookies, and causal dining outlets like Applebee's and Cheesecake Factory. Any of the neighborhood outlets for those restaurant chains could be a casualty this year. For too many customers now, it's McDonald's or bust.

Davidowitz doesn't think a huge government stimulus will help. Better to let things bottom out naturally before regrouping. "Obama's plan will make it worse," he says. "We got into this by borrowing and stimulating, now he wants to borrow and stimulate more."

In Pictures: Where You Won't Shop in 2009


Charming Shoppes (owner of Lane Bryant, Fashion Bug, Catherines)

Lane.2gif.gif
© AP Photo / Chris O'Connor

Specialty: Women's plus-size

2008 closings: 150 (6% of total)

Outlook: Lots of debt, performance is terrible (losses of over $260 million for the 12 months ended in November 2008). The company already said it will close at least 100 more stores this year. Who knows if it can survive?


Eddie Bauer

Eddie1.gif
© AP Photo/Charles Bennett

Specialty: Outerwear

2008 closings: 29 (8% of total)

Outlook: The specialty retailer catering to 30- to 54-year-olds is on the critical list as losses mount and shares trade at 50 cents.

Ultimately unlikely to make it.


Timberland

Timb1.gif
© JIN LEE/Bloomberg News /Landov

Specialty: Outdoor Apparel

2008 closings: 40 (16% of total)

Outlook: Not on the critical list, but expect significantly more closings.

The footwear company is still sponsoring this year's Sundance Film Festival.


Ann Taylor

Ann1.gif
© AP Photo/Paul Sakuma

Specialty: Women's apparel

2008 closings: 60 (6% of total)

Outlook: After 180 layoffs, the women's clothing chain announced an additional 57 store closings over the next two years.

Relatively healthier than other struggling retailers, but figures to shrink further.


Zales/Piercing Pagoda

zales.jpg
© AP Photo/Paul Sakuma

Specialty: Jewelry

2008 closings: 105 (12% of total)

Outlook: Absolutely in free fall, more closings for sure.

Zales may not make it.

Click here for the full list of Who's Set to Shutter Stores?



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Hermes

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Wow. All these closings are really stressful, and it's scary to think of everything that will be closed in the near future.

I have to say I'm surprised that 1/3 of women don't plan on any new clothing purchases. Even if people aren't planning shopping sprees, I can't imagine making it through a whole year without even replacing worn-out basics, bras, and everyday shoes.

-- Edited by ttara123 at 11:51, 2009-01-23

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Kitty


Hermes

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A year without any shopping?!!?!

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Sibeski


Dooney & Bourke

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Kitty wrote:

A year without any shopping?!!?!


I agree with you Kitty! 
My spending has increased and probably will throughout 2009, especially on clothes and housewares.  However I have cut out specialty coffees and started baking more.  Everyone is different and I sometimes feel the media is promoting mass-panic. 
* shrugging shoulders *



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Kelly


Hermes

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Sibeski wrote:

 

I sometimes feel the media is promoting mass-panic. 
* shrugging shoulders *

 



I feel that way sometimes too. I'm not saying people shouldn't be careful about their spending, or be looking after their finances, but I think a lot of people are changing their spending habits because of the media, and not because they actually need or want to. And it's not good if everyone keep saving and no one spends any money.



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jj


Kate Spade

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Wow. I know that a few smaller chains are closing at malls around me. I also heard that Talbots/J Jill are going out of business.

I don't know, I think "goody chains" would do well in this economy. For example, if I wanted to take my kids to the mall for the afernoon, maybe we couldn't afford to each lunch but could afford a small treat like a pretzel or ice cream cone.

I do plan to spend less on clothes this year, but would never cut back to zero!! I do plan to clean out things I don't wear and use any money I make eBaying them to support future purchases.

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Dooney & Bourke

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"One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. "

you have to wonder who they surveyed to come up with these numbers. i find it hard to believe that so many people would quit buying clothes. plus, the year has just started. what's the chance that they're actually going to keep their word?


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Hermes

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Sears.  Sears?  Sears?!  I'll believe it when I see it.

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Hermes

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ttara123 wrote:

 

Sibeski wrote:

 

I sometimes feel the media is promoting mass-panic. 
* shrugging shoulders *

 



I feel that way sometimes too. I'm not saying people shouldn't be careful about their spending, or be looking after their finances, but I think a lot of people are changing their spending habits because of the media, and not because they actually need or want to. And it's not good if everyone keep saving and no one spends any money.

 



nod.gif



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Kenneth Cole

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ttara123 wrote:

 

Sibeski wrote:

 

I sometimes feel the media is promoting mass-panic.
* shrugging shoulders *

 



I feel that way sometimes too. I'm not saying people shouldn't be careful about their spending, or be looking after their finances, but I think a lot of people are changing their spending habits because of the media, and not because they actually need or want to. And it's not good if everyone keep saving and no one spends any money.

 



 I really think you're right here. I think a lot of people who are really relatively okay as regards job security, income etc are finding it easy to get panicked by the media reporting and maybe they don't need to be?



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FashionPrincess


Hermes

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All I know is that if Baby Gap ever closed, I don't know what I'd do, so hopefully the Gap brand drops Old Navy or something before it would ever come to that... cause seriously then Xzavier may have to run around naked wink.gif

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itsapinkthing


Coach

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FP Gap has been struggling for a while and they did close some of there smaller stores las year. The kids store I worked at parttime was casualty of those closings.
I agree about some people who really should not he worried being scared by all this. Since the move we are making quite a bit more, but we are spending far less. In the last few months we've paid off a lot of revolving debt and plan to pay our cars off early too. I think we realize IF something ever happened we'd rather not have anything outstanding hanging out there. I also have refused to pay full price lately, there are always codes and coupons. For us while we have no real reason to be scared, my husbands income is increasing and his job is stable, all the economy talk has made is act much more responsibly. I find it hard to spend normaly when I know people are struggling. I feel guilty wanting or buying new things when I have a closet full of things with tags. I think of been good for us to be more aware. It's made is appreciate more and realize we have so much.

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Hermes

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^^ Ditto to itsapinkthing. We're doing better than ever (I almost feel guilty typing that), but we've upped our savings so we're essentially living on the same amount as before, but all the doom and gloom economy talk has us being just a bit more cautious. We're paying off the cc's that crept up during the holidays and working to pay off the car as fast as possible. While I think we're okay as far as job security goes, I think it doesn't hurt to put a bit more towards savings just so that we're in better shape *in case* something were to happen (and knock on wood it doesn't). All that means that we are spending a bit less than we usually would, but I expect that to change as soon as the cc's are paid off in a month or two.

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Hermes

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ttara123 wrote:

Sibeski wrote:


I sometimes feel the media is promoting mass-panic. 
* shrugging shoulders *


I feel that way sometimes too. I'm not saying people shouldn't be careful about their spending, or be looking after their finances, but I think a lot of people are changing their spending habits because of the media, and not because they actually need or want to. And it's not good if everyone keep saving and no one spends any money.


I agree.  The only way we're going to save the economy is to spend, spend, spend.  So if you've got it, spend it! 

I don't know about the other stores (I think it's also a matter of a declining busniess life cycle for those brands), but we can at least try to keep Ann Taylor in business smile



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Marc Jacobs

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FashionPrincess wrote:

All I know is that if Baby Gap ever closed, I don't know what I'd do, so hopefully the Gap brand drops Old Navy or something before it would ever come to that... cause seriously then Xzavier may have to run around naked wink.gif


I guess Xzavier and Hayden would be in the same boat.  Hayden has never worn anything but Baby Gap since the day he was born! He's had 2 University of Louisville Basketball Jerseys and 1 UofL Hoodie and that's IT.  EVERYTHING else is Baby Gap, down to his socks! Whew, I don't know what I'd do!!



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