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December 2, 2008 6:30:22 AM CST

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Retailers Checking Out as Economy Falters

Posted Apr 15, 08 8:00 AM CDT in Business 

(Newser) – Stores across the country are closing their doors, the New York Times reports, victims of a downturn in consumer spending. Retailers are often heavily leveraged, and as the economy falters banks are tightening credit. Several chains, including Sharper Image, have declared bankruptcy; others like Footlocker, Ann Taylor, and Zales are closing stores to stay afloat. “You have the makings of a wave of significant bankruptcies,” said a former Kmart executive.

Eight mid-sized chains have filed for bankruptcy since fall, and one big one—Linens ‘n Things—is expected to follow this week. And whereas bankruptcy was once survivable, rules have grown stricter since 2005. “It’s no longer reorganization or even liquidation for these companies,” said one bankruptcy lawyer. “In many cases, it’s evaporation.”

Source New York Times

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    Bankrupt, Linens 'n Things Will Fold 120 Stores Linens 'n Things filed for bankruptcy protection today, MarketWatch reports, and plans to close 120 stores nationwide as other operations continue. "The significant deterioration in the mortgage, housing and credit markets and the resulting impact on the retail marketplace, particularly the home sector, has overwhelmed the operating and merchandising improvements that we have made over the past two years," the company's new chairman said. More »

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    Linens 'n Things to Go Bust Linens ‘n Things ls expected to file for Chapter 11 by Tuesday, the deadline for a $15-million quarterly debt payment, the Wall Street Journal reports. The move would make the home-furnishings giant the first major retailer sunk by the housing crisis, after bloated debt and plummeting demand handed the New Jersey company $242 million in losses last year. More »

Pedestrians walk by a Sharper Image store in Beverly Hills, Calif. in this Feb. 27, 2008 file photo. Sharper Image is among the retailers that have recently filed for bankruptcy   (AP Photo/Nick Ut, File)
Jon Tapper holds a pair of unredeemable gift cards from bankrupt retailer The Sharper Image at his office in Boston, Monday, March 3, 2008.   (AP Photo/Josh Reynolds)
Empty retail space is available at Orchards Corner mall in Lawrence, Kan., Friday, Feb. 29, 2008.   (AP Photo/Orlin Wagner)
Empty retail space is all that remains of a Bombay Company story at the Town Center Plaza shopping center in Leawood, Kan., Friday, Feb. 29, 2008.   (AP Photo/Orlin Wagner)
Eddie Bauer stores open doors for liquidation sales.   (Getty Images)
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economy • recession • bankruptcy • consumer spending • retail • retail stores • Sharper Image • Linens 'n Things • Ann Taylor


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