Where You Won't Shop In 2009
Tom Van Riper
While industry executives and shoppers will remember 2008 as the year the party ended, figure 2009 to be the year of the hangover. Already,
More pain is on the way. One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. That means the market is still far too saturated with stores.
Expect closings to rattle the likes of Lane Bryant,
Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers' debt loads and credit access don't figure to recover to pre-party levels for quite awhile.
"I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."
Retailers at risk in 2009, he thinks, include outerwear specialist Eddie Bauer and teen-apparel-seller Pacific Sunwear, along with Zales, the big jewelry chain. All three shuttered at least 8% of their U.S. stores last year, with many more closings expected.
The same is largely true of
Chief Financial Officer Eric Specter insists there is no cash squeeze, pointing out that the bulk of the company's debt isn't due until 2014. "We will have no problems meeting our obligations," he says.
Another possible casualty:
"I'd be surprised if Sears-Kmart makes it through the year," says Britt Beemer, who runs retail market-research firm America's Research Group.
Non-apparel specialists like Starbucks and
Davidowitz doesn't think a huge government stimulus will help. Better to let things bottom out naturally before regrouping. "Obama's plan will make it worse," he says. "We got into this by borrowing and stimulating, now he wants to borrow and stimulate more."