CyberCJH's Blog

After a sad and depressing Holiday season for retailers this year, here is a list of the retailers that I think will probably go out of business in 2009.

• Dillard’s : In the last quarter, the company lost $38 million. It recently cut staff and is in the process of closing under-performing locations. It only has 318 stores, which makes it a relatively small operation in a world dominated by outfits like Sears, which has about 3,800. S&P dropped the company’s credit rating recently.
• Pier 1: In the last quarter, revenue fell 7% and the company lost $30 million. With $183 million in debt, it won’t take much to tip Pier 1 into insolvency. Too bad, Kirstie.
• Rite Aid: Rite Aid is bloated with over 5,000 stores and the integration of its Brooks and Eckerd drugstore chains appears to be going very badly. The pharmacy has competition from huge operators including Wal-Mart. It has a massive debt load of $6.1 billion.

These companies will probably closing a lot of their locations in an effort to return to profitability:

• Gap (including Gap, Old Navy & Banana Republic) : Posted double-digit same-store sales declines for many of the months during 2008 and expects sales to get worse in 2009. If that is true, Gap may not make it through the year as an independent company. Fall.In.To.The.Tank.
• Sears (including K-Mart) : The company posted horrific numbers for most of 2008. Over the last year, shares of Sears have dropped from $114 to $37. The company will either have to close hundreds of stores or perhaps eliminate one of its two huge brands – K-Mart or Sears. I think the K-Mart brand will go away. Sorry, Martha. But, now you can focus on your new relationship with Macy’s. Sears is unlikely to go out of business entirely, but a lot of its 337,000 employees could be out of work next year. WTF is Sears anyway? You got your high-end stores like Lord & Taylor and Macy’s and then your low-end stores like Wal-Mart and Target. Sears is stuck in the middle with high-end store prices in a low-end store environment. They’re not competitive on anything.

written by cybercjh