This report was originally published by Michael Snyder at The Economic Collapse
Over 20 major retailers have filed for bankruptcy since the beginning of last year, and in 2018 we may break the all-time record for annual store closings that was established just last year. We are in the midst of the worst retail apocalypse in American history, and it appears to be picking up speed as retail giants such as Sears, JCPenney, Brookstone and Mattress Firm spiral toward bankruptcy. We live at a time when the middle class is being systematically destroyed, and so the truth is that U.S. consumers simply do not have as much discretionary income as they once did. Many large retailers believed that things would eventually turn around, and they have been fighting very hard to survive, but now time has run out for quite a few of them.
Mattress Firm
Everyone knew that Mattress Firm was in deep trouble, but it still surprised many of us when it was announced that they are officially planning to file for bankruptcy. The following comes from Reuters…
Mattress Firm Inc, the largest U.S. mattress retailer, is preparing to file for bankruptcy protection as soon as this week, as it seeks to exit costly store leases and shore up its business, people familiar with the matter said on Tuesday.
At this moment Mattress Firm has approximately 3,000 brick-and-mortar locations, and as those stores close down those abandoned buildings are going to be giant eyesores on street corners all over America.
Brookstone
When I was a kid back in the 1980s, it seemed like Brookstone had an outlet in every mall I visited. But now Brookstone has filed for bankruptcy, and all remaining mall stores will be shut down…
Brookstone filed for bankruptcy and will close its remaining 101 mall stores.
The mall and airport seller, best known for massage chairs, quirky gadgets, and travel luggage, filed for Chapter 11 bankruptcy in federal court on Thursday. It was Brookstone’s second bankruptcy round in four years.
Sears
Sears has been shutting down stores for years, but up until now they have never admitted that bankruptcy was on the horizon.
But now time has run out and emergency measures are required if Sears is to survive. The following comes from CNN…
Sears is running out of time to fix its problems, the CEO says.
Eddie Lampert, who controls most of the company’s shares through his hedge fund, told the board on Monday that it must address “significant near-term constraints” in its cash position.
Of course Sears is still not actually using the term “bankruptcy”, but even CNN is admitting that Eddie Lampert used “language that suggested the company could be forced out of business”…
Lampert did not use the word “bankruptcy,” but he raised the possibility that creditors could be wiped out, a process that often takes place in bankruptcy court, without immediate action.
He also said it was in the best interest of stakeholders to “accomplish this as a going concern” — language that suggested the company could be forced out of business.
Those that have been following my work for a long time know that I have repeatedly stated that Sears is going to zero.
Now we appear to be on the precipice of that actually happening, and it is a very sad day for America indeed.
JCPenney
Speaking of retailers that are going to zero, JCPenney is absolutely drowning in debt and has a very dismal prognosis for the future…
Leaderless, $4 billion in debt and with a stock price below $2, the besieged retailer faces an uncertain fate after posting its latest round of dismal earnings.
“They’re in a leaky boat that eventually will sink,” said Mark Cohen, the director of retail studies at the Columbia Business School and a former CEO of Sears Canada and other department stores. “The prognosis for the future is not happiness.”
In the end, JCPenney is not going to survive, and so America will have to shop elsewhere for substandard clothing at inflated prices.
Bed Bath & Beyond
Nobody is suggesting that bankruptcy is imminent for Bed Bath & Beyond, but if they continue to have disastrous sales results it won’t be too long before they are on the chopping block too…
The struggling retailer said Wednesday that it was bringing on two top management consulting firms to help it cut costs and improve its merchandise. CEO Steven Temares did not name the firms.
The housewares retailer needs help. Shares of Bed Bath & Beyond plunged nearly 25% Thursday to their lowest level since March 2000 because of awful sales during the previous quarter.
We are moving into the most critical time of the year for retailers. Most troubled chains will hang on through the next three months, but once we get to January and February we will see many of them give up the fight for good.
Meanwhile, some of the retailers that are still doing okay are warning that our trade war with China will likely mean much higher prices for consumers…
Walmart Inc. and Target Corp. are among the large retailers and food companies that have sent a letter to U.S. Trade Ambassador Robert Lighthizer warning that proposed tariffs on $200 billion on Chinese goods would hurt consumers and American businesses.
Walmart’s letter, dated Sept. 6, focuses on what it says will be the repercussions of the tariffs, which would apply to goods like food and beverages, personal care products like shampoo, detergents, motor vehicles and paper goods like napkins.
Of course U.S. consumers cannot exactly afford higher prices at this point. U.S. consumers have been spending more than they are earning month after month, and they are making up the difference by going into ever-increasing amounts of debt.
This is not what a healthy economy looks like.
If we had a healthy economy, the middle class would be growing and retailers would be thriving.
But instead, the vacancy rate at U.S. shopping malls just hit the highest level in six years…
The vacancy rate at metro and regional malls around the United States hit 8.6% last quarter, the highest since the end of 2012, according to data released Monday by real estate research firm Reis (REIS).
Back then, the economy was still working its way out of a recession and an excess of malls had been built in the preceding decades. Retail vacancies peaked at 9.4% during the middle of 2011.
Things are not getting better for the U.S. economy. We continue to see numbers that we have not seen since the last recession, and it appears that things will continue to deteriorate as we head into 2019.
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About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
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Sears is a penny stock now. This will be the last Christmas they see.
These retailers are Dinosaurs. They did not adapt so they will die.
They did not see what the Internet, a warehouse, and efficient shippers could do for you.
Wonder whats gonna happen with the lifetime warranty on Craftsman tools. LOL
Sears no longer owns Craftsman, so it won’t be effected. Stanley, Black & Decker owns Craftsman. Craftsman had devolved into a lot of Chinese junk bearing the Craftsman name before Sears sold it. Stanley is working to bring the quality back to the name.
Craftsman is in Lowe’s now.
I agree relik. But that said how could these stores compete against Amazon with its shipping subsidized by the central government?
Don’t be surprised to see Walmart fall. Free enterprise is long lost. FedGov picks the winners and losers.
These retailers aren’t the only problem, the economy has been in a recession for years, obviously these stores are going to go under.
I interviewed THREE TIMES with Bed Bath and BS earlier this year. Twice on the phone and once in person for a management position. Never heard from them again. I hope they go belly under. They treat people with utter contempt.
Money grubbing knows no bounds. Where is the sanity here? Constantly rising prices ends exactly where it’s going, broke. Wearing designer rags is the latest rage fashion statement. Back to caveman days as the poor house is expanding.
But….
Trump
This all started under Obama, get it right at least.
Sorry, Dan…
It all started when the gang of domestic and foreign bankers were given control of the American economy by Woodrow Wilson in 1913 with the Federal Reserve Act. The “money” in your pocket is a loan to you and your taxes pay the interest on that “money” every single year. The interest on “our” money this year will be half-a-trillion dollars and the interest rate is going up. When the rate gets to three or four percent every penny collected by the IRS will go those bankers and you will be eating the furniture in your house…if you still live in one!
People will always need stuff and things even in the worst of times. Other people will always be selling stuff and things. If Sears and the rest aren’t selling the stuff and things that they used to, it could be that they aren’t selling what the people want anymore, or that it’s not packaged and marketed in a compelling way, or that the perception of value just isn’t there. I’m not saying that the economy is all rosy. Folks have less disposable income than they used to. I’m one of them. Even in the midst of depressions though, some businesses do survive. The ones that do follow the trend, whatever that may be at the time, and have a good business model. The old name stores need to change or they will be replaced by something else because people will always need stuff and things.
We all probably have at least a few Craftsman power tools or Kenmore appliances or stuff that Sears used to sell. Better go online (or dust off the manuals) and order any spare parts you need. I’m still shocked how Sears blew its huge advantages, and now will die with stores full of Chinese junk.
Sears owned the catalog market but were too slow into the Internet (curiously Amazon and Target and Walmart are now offering pickup at brick and mortar stores like Sears used to!).
Sears stopped servicing their appliances and farmed it out to ‘contractors’ who do not cover the whole country and who want to sign you up for big service contracts.
Sears sold off its top brands (the only ones with value), leaving no reason to visit their stores!
In my experience, the red Communists don’t come up with even the smallest of new ideas. I found the same gear, in nylon, pot metal, and Hi-C, used across dozens of difference brands and in ‘unbranded’ models. Cross compatible.
There are three or four types of customers.
1. Those who want the best quality at a resonable price.
2. Those who want it dirt cheap regardless of quality (within limits).
3. Those who want the best at any price (rich people).
4. Those who shop for the experience.
5. Those who shop for the thrill of buying.
6. Those who need to be part of a fad, fashion, popularity, acceptance seeker.
OK, There are more than three or four types. And they overlap.
Sears, Pennies, and some others are boring. I haven’t been in one in years. Home Depot is BIG and they have probably taken a lot of the business from SEARS. So SEARS needs to do something drastic and advertise it with TV ads, big lights like a grand opening. Carry only tools MADE IN AMERICA. !!! Have a blow out sale. Offer free shipping with any purchase over $100.00 total for online shoppers.
Pennies could afford to put a place to eat in the middle of the store. Set up a stage and have some live entertainment (good looking talented singer/musician). A childcare section so mother’s can try on clothes.
Otherwise, Amazon will steal the show.
_
you cannot experience buying if you do not have money to do so.
your reflexion is invalid.
compulsive buying is a illness..
ban credit and usury would fix a lot of trouble in this world. you cannot at least blame arabs for that. may be the only intelligent thing they do.
Proud to say I haven’t set foot in a JC penny every since the gay lady became their spokesperson.
JC Penny started going down hill the late 80’s when they focused primarily on clothing at the expense of every thing else. They used to have their own line of tools. I haven’t purchased any thing from that store for at least a decade.
It is not a question of if but how soon JC Penny and Sears are gone for good. And they did it to themselves.
Hey Walmart go **** yourself…
This is good news. It tells me people aren’t buying shit and holding on to their $. There is more to life than impulse shopping. Go camping and fishing spend your time in the woods not the man made fantasy world matrix of buying shit to to make yourself feel better about being a corporate slave.
Sears is not coming back. period. It failed to modernize, spent billions printing huge cataloges that no one used post internet ordering days. Once they half way caught on to the trend, the process was far from welcoming or even remotely efficient. They carried brands which over time, like diehard & craftsman, took thier product manf overseas and began producing crap..this further injured thier already thinning customer base..its sad, but they failed themselves, consumers saw it and headed to other retailers and nothing can be done now to save them…
Actually, SEARS went into a death spiral decades ago. Used to be that you shopped in big brick & mortar stores and if they didn’t have exactly what you wanted they had a huge printed catalog from which you could order and then pick up the goods a few days later. Some CEO decided to divide the two operations into different store locations. So then you had “Catalog Shopping Centers” with just the catalogs and no merchandise…and you had stores with merchandise but no catalogs and couldn’t order Sears merchandise from those stores but had to drive to the other kind of store. THAT was the beginning of SEARS death. And that CEO moron probably got a twenty-million-dollar bonus for the damage he did. Our little town has now lost it’s catalog store and the remaining SEARS merchandise store has one garden tractor and one deep-freeze in the showroom. The nearest “Catalog Shopping Center” is now a three-hour drive from here. There’s no reason to go to SEARS any longer.
Amazon and Ebay in most cases have free delivery….and better prices,less overhead. Conversely,people aren’t making enough money to spend freely. Cars have come to a halt,houses are slowing down,interest rates going up,gas going up. Make the next list of those retailers that will go under.
Jim, Ebay has better deals than Amazon. I’ll go to amazon only as a very last resort but I like ebay better.
Rellik hit the nail on the head
Couldn’t of said it better
In a way I feel badly about Sears. They have been around for a long time and in my youth they were a very good store. There catalogs were the best. Had they had a management that was any good they could have been the leader in on line sales, they had the best tools. Their “Sears Best” products were true quality for the money. Everybody’s appliances are now LG trash. You cannot buy a good refrigerator. And I haven’t been in a Sears in years. SO Long Sears I’ll miss you.
“that we have not seen since the last recession”, which recession? The US has been in a recession since 2000. Are they talking about the 70’s? The US was in better shape in the 70’s than it has ever been since 2000. The last prosperous decade was the 80’s, the 90’s started out good but thanks to Clinton #1 ended horribly.
And this talk about tariffs hurting the US, back in 85 when we had tariffs our trade debt with China was 5 Million! Got that figure from the Census Bureau, you can look it up. The reason tariffs will hurt now is there is no manufacturing in this country any more, and it will take 10-20 years to bring it all back (if the next President doesn’t undo all Trump has done).
Just like people, a Country in todays World cannot be economically viable until it’s input (wages) exceeds it’s output (spending). The USA has not been economically viable for many, many years, thanks mainly to the policies Clinton #1 started!
Paranoid, you’re not missing anything. I was last in a Sears 3 months ago and they only carry a fraction now of what they used to have. My mother worked for Sears for awhile back in the 70s in the catalog order section. Their catalogs were definitely the best, especially the Christmas catalogs, LOL. That used to be my ‘wish book’ as a kid. Their products were among the best on the market. Now nobody has anything that’s worth a shit. I’ll also miss Sears.
I have found that if I shop Amazon can be beat and sometimes brick stores are better if Im buying multiple items and then saving on shipping.
The mall I grew-up with, just outside of Philadelphia (one of the first, built in 1966), lost its Macy’s in January 2018, and is down to just one anchor. The mall has reduced hours and is only open from 10:00 AM to 5:00 PM. There is no way this can go on for very much longer.
The mall is surrounded outside by restaurants, a cinema, and some specialty shops. All stores that use to be inside the mall but moved outside to avoid the high rents.
The death of these retailers has been long and drawn out, probably for our own good; to desensitize us to the coming changes. Even when these malls first opened many people questioned their viability; thought there was no way they could survive economically.
The power of negative thinking? Or something else. What use to be called good old fashioned American Common Sense? In any event, the beatings will continue until morale improves.
All of this stuff was built for an American Middle Class that is getting ready to close its doors for good.
Sad.
When I was a kid “porn” was looking at the bra and panty models in the Sears or Spiegel catalog.
Now Craftsman tools are mostly made in China and porn leaves nothing to the imagination.
Sad.
Two thoughts.
Anyone, with a little gumption and troubleshooting ability, a truck, a phone, and a garage or basement, can buy used items, repair them, and sell them at a profit.
Anyone, with a dependable vehicle, a sincere honest personality, and a pleasant demeanor, can run errands for old people and the handicapped.
This is how any prepper can survive. These jobs never go away and take minimal investment and skills.