Tuesday, April 15, 2008

Coming to a Mall Near You: Vacancies

Last year a new open-air shopping area opened in the south Austin community of Sunset Valley in an area already filled with strip malls. One of the new stores was Bombay, the furniture seller. They barely had time to train the new staff before "Going Out Of Business" signs were plastered in the windows. That was quite odd and I just assumed it was that one store. The whole chain shut down, and there are more on the way out.
Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers.


The International Council of Shopping Centers, a trade group, estimates there will be 5,770 store closings in 2008, up 25 percent from 2007, when there were 4,603

Adding to the gloomy economic uncertainty is the news that a oil today set a new record by surpassing $113 a barrel.

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