Off the Grid News – by Daniel Jennings
Hundreds 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.
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.”
http://www.offthegridnews.com/2014/02/10/retail-apocalypse-major-chains-closing-hundreds-of-stores/
I Love how they blame online retailers, then say maybe the middle class is disappearing! I have always thought of my family as middle class, and I can tell you that since 2008, most of my purchases have been for PREPS, and nothing else, unless it was really needed. I used to be an avid shopper of home improvement stores, decorating stores, etc. I Love to decorate, it has always been one of my “things”, I just Love making my home look like a home. I cannot tell you the last time I went “decorating” shopping, it has been years. 🙁 Which I miss, but I figure getting ready and surviving were way more important. I do miss it, I am not going to lie, but prepping has become my new “thing”, and when I open closets in my home, I smile, knowing we have enough preps to survive, instead of a new rug to walk on.
So I can see how these retailers are closing, I took my money away from them years ago, and I know a lot of other people have also. They say the “survival” web sites are making a killing, that is where people are spending any extra money that they have. Food, Water purification, Guns, and Ammo are more important than a TV, new rug, curtains, or any other cheap Chinese sh** these stores push on us.
and she can cook. 🙂
40 or 50 million people not working……what took so long for these closings?
This is the perfect example of why the system we have doesn’t work. If the middle class is destroyed then goodbye kmart, target, etc. I guess the elite behind closed doors have been working on this for years and now that Wall Street is going thru the roof they are celebrating. This country has just become insane.
Here are the twin KEY destroyers of our economy:
INCREASING the supply of labor DECREASES the wage and employment rate- basic economic law of supply and demand determining the price (wage rate) of labor.
America has a yearly -$788 BILLION trade deficit because of the fraud of “free” trade, and we already allow 1,000,000 LEGAL immigrants into our jobless economy every year. Real middle class wage rates have been in decline since 1973 because of this. Only TARIFFS that eliminate the comparative advantage of poverty, and immigration rates LOW enough to no longer artificially suppress wage rates will create the necessary conditions to allow us to reverse our decades long economic decline. ALL other “solutions” are a LIE, “taxes, unions, regulations” the chanted misdirection mantra of those trying to keep you from seeing these twin KEY facts.
Congress is debating bills to increase LEGAL immigration to 1,500,000 per year in addition to 100s of thousands of “guest workers” yearly. In addition to this the President is pushing for the TPP Super NAFTA “free” trade bill that is being written in secret, even Congress not allowed regular access to it. The TPP will elevate multinational corporations to the level of nation-states and allow them to VOID national laws, court rulings, and Constitutional process. Either of these bills passing will be a body blow to the country, if both pass- GAME OVER for American sovereignty and the middle class.
We need to FREEZE immigration until poverty and unemployment are no longer a national issue. Anything less just converts our immigration policy into an immoral human wrecking ball aimed at our wage scale and national cohesion. We need to raise TARIFFS high enough so that low wages and standards no longer act like the force of gravity on our own. Anything less will destroy the wage, employment, and tax base necessary for civil society to exist.
Agree.
And…
Anyone dumb enough to move to the US shouldnt be able to pass the test.
My business partner is a sheeple and proud of it. He loves regurgitating the mass mantra of ‘america the great’ and ‘we will win in the next election’ but even he(for the last two years) claims next february will be the collapse of the economy.
His reason is that every feb the stores all lay off a big portion of the seasonal workers and cut back of full timers. He thinks that the soccer moms who have gotten jobs the last few years to help supplement the household income will be part of that lay off.
When the fancy hair cant be done and the bmw gets repo’d its tits up. (the economy not the housewife)
It will be tit’s up for the house wives to because it will be a choice between starving and selling sex on the street.