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.”