Retail stores are the end result of a long line of commerce. Those items you buy at the mall aren’t made locally. Raw materials are formed into base product, which is shipped to factories to be be fabricated into parts, which are shipped to a final assembly plant. Not every product takes this path, but you get the idea.
Every time you buy a pair of shoes, you keep a lot of people in a job. When people spend less money, the retail shops can’t stay open because they’re not making enough money. Not only do the people who are working at the retail stores lose their jobs, but so do some of the people that work at the manufacturing plants.
Why are people spending less? Lost jobs and higher mortgages are big reasons (not to mention insurmountable debt). It’s a vicious circle, though. Enough people spend less and a few companies need to make employment cuts. Now these people are out of work and rapidly cut back on spending. If these people can’t find other income, they continue to buy less stuff and companies cut back a little more. Eventually, the lack of spending causes entire companies to go out of business, making their entire workforce out jobless.
This is a somewhat simplistic synopsis of what’s happening, but it gets the point across. As more retail stores close, the higher the unemployment will be. If the economy can’t recover fast enough, large amounts of people will be jobless. Unfortunately, that’s where we’re headed.
Here’s a partial list of Retail closings so far:
Circuit City – 155 stores closing
Ann Taylor – 117 Stores to close nationwide (Closings planned over the next 3 years)
Lane Bryant – 40 Stores closing nationwide
Fashion Bug – 100 stores closing nationwide
Catherines – 10 stores closing nationwide
KB Toys – 150 stores closing nationwide
Eddie Bauer – 27 stores closing nationwide
Cache – 14 stores closed but several others open
Disney Store – 98 stores closed nationwide
Home Depot – 15 stores closed nationwide, Wont open 50 stores planned for 2009
Talbots – 78 men’s and children’s stores closed by September
Pacific Sunwear – 154 remaining Demo stores closing
Foot Locker – 140 stores closing by end of 2008
Linens N Things – 371 stores liquidating, All set to be closed by Jan. 1
Movie Gallery – 160 stores as part of reorganization plan to exit bankruptcy
Zales – 100 Stores
J. C. Penney, Lowes and Office Depot are scaling back or delaying expansion. Office Depot had planned to open 150 stores this year, but will now open 75.
Sprint Nextel – 125 retail locations
I’m sure there are more, as I didn’t need to research very long before finding this list (and a verified list from a news source, not some chain letter email). Keep in mind that the above doesn’t even list the non-retail companies that are laying off people.
The time to prepare is now. It’s not hard to see where the economy is going. There is still time to get ready.