Retailing Chains Caught in a Wave of Bankruptcies

Retailing Chains Caught in a Wave of Bankruptcies

www.nytimes.com

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and shopping districts across the country.
The surging cost of necessities has led to national belt-tightening among consumers. Figures released Monday showed that spending on food and gasoline is crowding out other purchases, leaving less to spend on furniture, clothing and electronics.

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The recession-in-all-but-name is starting to hit main street and the local mall, as smaller retail chains go bankrupt and large national chains close hundreds of outlets to survive.

This contraction was inevitable and has just begun, and belies all the feel-good economic rhetoric coming out of Washington.

What is so deeply troubling is that skyrocketing food and energy costs are shifting consumer spending and driving these retailers into bankruptcy and undermining the foundation of the consumer sector of the economy.

Not everyone is a loser, though; Exxon-Mobil, the second largest corporation in the world, posted a record $39.5 billion annual profit for 2007.

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