Wednesday, January 19, 2011

Where You Might Not Shop In 2011.

By Tom Van Riper,
Where You Might Not Shop In 2011
Blockbuster Stores ClosingDon't tell Borders or Liz Claiborne that the retail business is getting healthy. Despite years of industry cachet, both lose money, tout share prices in the single digits and just couldn't close down stores fast enough in 2010.
Chalk it up to fierce competition and customers' continued refusals to part with cash very easily, even as they loosen the purse strings a bit. Things are certainly less bleak. The latest results from the Commerce Department show that sales rose 6.6% for all retailers in 2010, the best year-over-year result since 1999. Wall Street has been responding. The S&P Retail Index is 23% higher than a year ago.

In Pictures: Where You Might Not Shop In 2011

The downside: the sales increase came off a low base, thanks to the disaster of 2009, and the 0.6% rise in December sales over last year was less than expected. Customers are paying with cash, not credit cards, an indication that they're still watching money closely. And given all the stores that are still closing doors, it's clear that some of the excess capacity from the go-go years is still around. Ask an industry expert about the current state of retail, and the feeling is better, but not great.
“You can't tell me it's good,” says Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consultant and investment bank. “Given that Wal-Mart is down for six straight quarters, that Target missed [profit expectations] by a mile, and that Best Buy had a major earnings miss, how well can retail be doing?”

Borders Group, delaying payments to publishers and distributors as it struggles to refinance its debt, shut down approximately 200 of its Borders and Waldenbooks stores in 2010. With book readership declining in general and Amazon snagging a lot of the remaining business, things aren't easy for traditional booksellers. Rival Barnes & Noble recently completed the shutdown of its low-volume B. Dalton unit, once a staple of shopping malls across America. The last 50 B.Dalton stores were closed this past year.

Apparel sales are doing better these days, but that doesn't mean there's room for everyone. Not when so many players are out there competing for dollars that consumers are still parting with cautiously. TJ Maxx just shut down its A.J. Wright discount line, taking all 162 stores with it. Bebe Stores closed its PH8 unit at a cost of 48 stores.

And Liz Claiborne, struggling with losses selling through its outlet stores, shut them down altogether (87 in all) in favor of putting out their product through J.C. Penney and QVC. “They really had no choice,” says Davidowitz. “This at least gives them some cash flow for awhile.”Meantime, in case there was any doubt about the influence of Netflix and iTunes on the entertainment front, movie and music sellers Blockbuster, Movie Gallery and Trans World Entertainment's F.Y.E unit have all been high-tailing it out of many U.S. towns. Movie Gallery, which once boasted almost 5,000 stores, completed the liquidation of its remaining 2,400 units last summer

Not that every store closing is a bad thing. Some companies are effectively using targeted closures to their advantage. Casual apparel chain Abercrombie & Fitch has shut down approximately 60 combined flagship and Abercrombie Kids locations, about 10% of its total. The downsizing is serving the company well: Comparative sales at the remaining stores have improved and analysts have upped their per-share earnings estimates significantly for the January quarter.

Sometimes less is more. Just don't tell that to Blockbuster.


Stores closed: 955
Percentage of total: 23.6%

Netflix is winning the online movie rental war, and Blockbuster can’t seem to close stores fast enough to get out from under its crushing debts. The company hopes to reignite interest with self-serve kiosks. We’ll see.

Liz Claiborne
Liz ClaiborneLiz Claiborne

Stores closed: 87
Percentage of total: 100%
he struggling apparel chain shuttered its branded stores and is now trying to make it work by selling through JC Penney and QVC. By getting goods out cheaper, the move at least gives the company a short-term lifeline.

A.J. Wright

A.J. WrightA.J. Wright

Stores closed: 162
Percentage of total: 100%
The TJ Maxx discount line is shutting its doors for good, effective in February. The company plans to convert slightly more than half the shuttered units into TJ Maxx, HomeGoods or Marshalls stores, though more than 4,000 job cuts are still expected.


Stores closed: Approximately 200 (analyst estimate; company won’t confirm)
Percentage of total: 28%
Sinking revenue has Borders scrambling to refinance its debt and delay payments to publishers. Many analysts doubt its viability going forward.


Stores closed: Aproximately 1,000 (analyst estimate; company won’t confirm)
Percentage of total: 22.7%
truggling as a higher-priced alternative to Subway, the sandwich chain began putting mini-stores into gas stations to boost market share. Upscale fast sandwiches are a tough position in a down economy.

Jones Apparel

Jones ApparelJones Apparel

Stores closed: 173
Percentage of total: 18.4%
The fashion chain, with brands including Evan-Picone, Nine West and Ann Klein, is seeing margins squeezed by higher materials costs. Analysts say footwear and accessories are its best bets going forward.

Stores closed: 99
Percentage of total: 17.6%

Most of the planned store closings for the music and DVD seller are still in progress. Parent Trans World Entertainment saw a 20.2% year-over-year sales drop during its latest quarter. In the age of iTunes, the music business is a tough grind for many others.

This sucks i want some of these to stay (raymond) click here to go there

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